Work on Image Building, Modi Tells India’s Realtors
When Prime Minister Narendra Modi met the captains from India’s real estate sector on February 13, his message to them was loud and clear—that the government has done its bit to help the sector; the responsibility to make further improvements lies with the developers. Addressing a gathering organised by developers’ body the Confederation of Real Estate Developers Association of India (Credai) , Modi said measures announced in his government’s Interim Budget has set the tone for betterment; the developers only have to seize the movement and work towards re-building their image.
"The sector plays a catalytic role in providing employment. Do you get enough respect? Who is responsible for that," the PM posed the question, and asked developers to overthink the goods and services tax (GST) . Developers have been demanding rates under the new tax regime be brought down further to help the sector, which has been struggling with a slowdown for a half a decade now.
Stating that his government has been trying to help the sector build a positive image in the past four-and-a-half years, the PM said the implementation of the real estate law and the benami property law showed his government’s intent to get that goal. Modi said the note ban move was a step in that direction. Demonetisation, he said, stopped the use of unaccounted money in the sector, increasing the level of transparency in a sector that has taken a severe image beating in the past over a variety of issues.
While giving a point-wise explanation on how several measures that were announced in the Interim Budget would boost the demand in the sector, the PM asked developers to speed up the construction work to meet the rising demand.
Income of up to Rs 5 lakh has been made tax-free. “This would benefit the housing sector as the surplus will find its way into real estate”, the PM said.
The tax-deducted-at-source (TDS) threshold for rental income has been increased from from Rs 1.80 lakh to Rs 2.40 lakh. This would encourage people to buy second homes.
The 100 per cent deduction of profit under Section 80-IBA of the Income Tax Act has been extended for one more year to housing projects approved till March 2020.
The period of exemption for levy of tax on notional rent on unsold inventories has also been extended from one to two years.
The GST on real estate has been reduced to eight per cent for affordable housing and 12 per cent for other under-construction homes.
The GST rate on various construction materials has also been brought down to 18 per cent from 28 per cent.
These two steps would help the sector in several ways, the PM said. He also advocated new technologies be used in the construction process to speed up delivery of projects.
Applauding his government’s effort, Modi said his government built 1.5 crore houses for the poor to realise the target of housing for all by 2022. "By 2022, all homeless will get a house. We do not make tall claims," he said.
Modi also advised developers to focus on providing homes to the neo-middle class — people who are coming out of poverty.