There are a few factors that we hope will be aligned to the real estate sector in the upcoming budget.

Generally individual investors are a great driving force for the housing sector. In my opinion deduction under section 24(b) towards interest on housing loans should be increased to Rs.5.00 Lacs from the current limit of Rs.1.50 Lacs. The Existing limit of Rs.1.50 Lacs was last enhanced in 1999, after which there have been numerous changes in the real estate prices and the home loan amount. This initiative is likely to impact the buying decision of a consumer in a positive manner.

Taxation in the real estate sector should be simplified and reduced. The buyers are burdened with direct taxes like the stamp duty and registration charges of 6% , service tax of 2.5% and VAT of 1% on the total value of the flat. . Thus a total of 9.5% towards taxes acts as a deterrent for a consumer. From a customer point of view, an increase on the cap on housing loans at subsidized rates would help the customer to increase their savings basket. Similarly, concessions must be granted on service tax as real estate is more construction driven and is not a service offering. Hence the service tax component levied on the industry as a whole should be relooked at.

The formulation of the Real estate regulatory body is a welcome step as it will aid the process of transparency and provide better clarity to all. Such initiatives must be encouraged, as they are likely to bring about a positive change in the industry, resulting in greater transparency and better customer experience
The ministry should also consider and grant redevelopment projects the status of an infrastructure project as it serves the purpose of overall town planning, provides aesthetic enhancement, better infrastructure, enhanced lifestyles and thereby overall growth.

With real estate contributing to the growth of the economy it is time that the sector is recognized as an industry. This will help in accruing credit from financial institutions at par with other industries.

Babulal Varma, Managing Director, Omkar Realtors & Developers Pvt. Ltd