The unforeseen pandemic wreaked havoc for every economic sector, but the real estate industry is one of the hardest-hit fields by the lockdown enforced due to Covid-19 guidelines. How? During the quarantine days, construction activities were at a halt, the absence of labor, plummeting demands, and many more causes layered on the sector’s woes. Along with several other issues, Union Budget 2021 shouldered the responsibility of reviving India’s second-highest employment generation area that contributes to around 8% of our economy.
Are you someone who is looking for real estate properties in Kolkata? Then you must know about the recent developments that will ultimately help you in making informed decisions. How will the Finance minister, Nirmala Sitharaman’s announcements tackle the ailing industry of real estate while simultaneously maintain its growth for the future? Let’s delve into the critical features of the Union Budget 2021-22.
“This government sees ‘housing for all’ and affordable housing as priority areas.” With this in mind, the finance minister extended July 2019 Budget scheme by one more year. So, you will enjoy the benefits of slashed interest of Rs 1.5 lakh till March 31, 2022, for the purchase of reasonably priced houses. Furthermore, Sitharaman also mentioned that affordable housing projects can provide a tax holiday for another year, too, till March 31, 2022.
If you are dealing with residential properties in Kolkata, this announcement must sound like music to your ears. The new standard and work from home culture serves the agenda to own a secured home. Since the demand for affordable housing will eventually surge, the government decided to fulfill this immediate requirement. This incentive provides an opportunity that will lead to an increase in affordable living spaces that will, in turn, help in job creation rendering financial stability to many. Not only this, but the finance minister also proposed to exempt the migrant workers from paying taxes for notified affordable rental housing projects.
As the country’s economy was suffering through the brunt of lockdown, realtors imagined the Union Budget 2021 would bring about a positive turn of events. The government decided to stimulate the construction of national infrastructure to accelerate the economic cycle, promoting urban and rural employment. Sitharaman allotted Rs 20,000 crores to capitalize the Development Financial Institution since infrastructural expansion requires prolonged debt financing. She hopes to create a lending portfolio of Rs 5 lakh crores within three years for DFI.
You may also witness an advancement of two new technologies, that is, ‘MetroLite’ and ‘MetroNeo.’ It will be done with an ambition to deliver cheaper metro rail systems in Tier-2 cities and the marginal areas of the Tier-1 municipalities. While displaying the Union Budget 2021, Sitharaman asserted that the conventional metro would be running 702 km. And 1016 km of metro and RRTS would soon be deployed in 27 cities. Under the National Infrastructure Pipeline, nearly 217 projects have been commenced that cost around Rs 1 lakh crore.
Nirmala Sitharaman intends to spare the dividend payment to Real Estate Infrastructure Trusts or Infrastructure Investment Trusts (REIT/ InvIT) from TDS (Tax deduction from source). She aims to alter the funds needed for infrastructure and real estate sectors by facilitating debt financing of InvIT and REITs by external portfolio investors. This can be achieved by revising the amendments in the relevant legislation. The shareholders faced the problem of incorrectly estimating the dividend revenue to pay the tax in advance. For this reason, the obligation for the advance payment will only come into place after the dividend’s clearance. The Foreign Portfolio Investors would enjoy the benefits of a low treaty rate on dividend income. Also, you might even hope to find some respite in the scenarios of escalating equity capital. This decision is expected to have an exciting appeal to the investors.
Ever since demonetization happened, liquefying properties have been a concern for most developers. You must have been hopeful of an announcement wherein the government would ease the borrowing options. Well, your prayers have been answered because this problem was on the government’s checklist of significant challenges. They were cognizant of the copious hardships brought about by the pandemic, so they sought to pioneer liquidity measures that would assist in performing the business in a legal framework. Efforts have been taken at a number of areas like reducing stamp duty, extending the deadlines for project’s completion, and RBI allowing a spin out for the co-lending program. It seems like a perfect moment to invest in luxury residential projects in Kolkata because always remember, as a developer, you have the requirement of an easy cash flow system to generate capital that will eventually aid in the completion of construction works.
Senior citizens of age 75 and above with an income source solely based on pension and savings interest would be free from logging income tax returns. To enhance the efficacy and responsibility of the system, the government has tried to make it faceless. Anyone who earns somewhere around Rs 10 lakhs and files a taxable income of around Rs 50 lakhs are referred to as small taxpayers. They can now consider solving issues with the dispute resolution committee, which will be formed soon. Along with this, the pre-filled tax forms shall incorporate added details of any expenditure done in financial securities.
Welfare benefits would now be applied to construction workers, and minimum wage rates would pertain to all the existing segments. An interface would soon be initiated to gather relevant data on building and construction workers to allow the government to develop wellbeing, residential spaces, proper expertise, insurance, and meal schemes for the laborers and the migrant workers. Simultaneously, the incidence of compliance for employers will be lessened, with single authorization and online returns. The FM even said that women will indeed be permitted to function in all the dimensions and overtime hours, with sufficient safeguards. The Union Budget focuses on Minimum Government, Maximum Governance, aiming to smoothen the real-estate business and eventually prove itself to be laudable.
The finance minister, Nirmala Sitharaman, had to tread carefully with restricted space for any great information under the Union Budget 2021. It has been stated that almost Rs 54,581 crores has been allocated to the Ministry of Housing and Urban Affairs. The afore-mentioned developments would result in facilitating development and expansion in the real estate industry. Such changes would allow this sector to transcend from a bubble of mere existence to actual growth, given that it has to be implemented with proper attention and execution. To sustain the demand for properties, the government must accomplish the objectives within a time frame to measure the performance.
The real estate industry is one of the lucrative sectors, and if you need expert assistance or are looking for a top-notch dealer, you may search through the business directory for Kolkata. You can easily avail of it through several business listing service portals that will seek to cater to your desires.