The government is due to present Interim Budget 2019 in Parliament on February 1.
For real estate sector, a slowdown in demand across segments has highlighted many challenges ahead.
The real estate sector - which relies highly on borrowings - has faced a slack in recent past due which in turn has impacted property prices.
Many property consultants expect cash crunch to continue in real estate sector.Industry body Ficci has said that government should increase income tax deduction limit for individuals on interest payment against loans taken for acquisition or construction of self-occupied property.Such a move should increase demand for housing, Ficci noted, in its pre-Budget recommendations to government.Rationalisation of provisions with regard to transaction in immovable propertyIt is recommended that a different rate of variation may be provided for metro and non-metro cities (say 10 per cent or higher for metro cities and 5 per cent for non-metro cities).Remove restriction on set-off of loss from house propertyThe Finance Act, 2017 has inserted sub-section (3A) in section 71 of Act to provide that loss from house property up to Rs.
2 lakhs only will be set-off against income under other heads in same financial year.
Loss above Rs.
2 lakhs is eligible to be carried forward for a period of eight years and can be set-off against income from house property only.
This provision contradicts with intention of government to incentivise housing sector and promote investment in real estate sector.This could act as a dampener for promoting investment in housing sector, and should be removed.Include real estate sector within purview of Section 72A of Income Tax ActSection 72A of Act needs to be amended to include real estate sector within its purview.
This will enable consolidation and consequential efficiency for sector.TDS (tax deducted at source) on payment on transfer of immovable property - Section 194-IAIt is recommended that requirement of TDS by buyer on transfer of property be removed or limit for applicability of TDS be increased from Rs 50 lakh to Rs 1 crore.Period of holding of REITs to be made in line with listed sharesIt is recommended that a suitable amendment should be made in Section 2(42A) of Act to reduce period of holding to 12 months (as applicable for listed shares) even in case of units of REITs listed on a recognised stock exchange.