06-July-2019 - CREDAI Bengal
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06-July-2019
CREDAI Bengal Daily News Update | 06.07.19
NEWS ON UNION BUDGET 2019
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Newspaper/Online The Times of India
Date July 05, 2019
Link https://content.magicbricks.com/property-news/industry-buzz/union-budget-
2019-20---affordable-housing-infrastructure-to-benefit/107323.html
Union budget 2019-20 - affordable housing, infrastructure to benefit
Overall, Union Budget 2019-20 is a balanced one with more of a long-term vision as a follow-on of
the Interim Budget. It has obviously been formulated to restore confidence in the India growth story as
a whole, and more importantly within India Inc.
As far as real estate is concerned, the budget had a few hits and several misses. Infrastructure stayed at
the top of the government's agenda. This is of course significant, since infra development is one of the
main propellers for economic growth and real estate benefits both directly and indirectly.
The new FM had an uphill task of balancing priorities in Modi 2.0's maiden budget. Most sectors -
including real estate - stridently sought concessions to kick-start stagnant consumption and
investments. Steering the country out of the stranglehold of economic slowdown and creating
employment were also high on the priorities list.
The Union Budget was on track in terms of encouraging savings and investments and empowering
rural India. Its thrust towards the digital economy and start-up evolution will have indirect benefits in
the long run.
As expected, affordable housing under the PMAY scheme (also a critical employment generator) got a
boost.
Positives for Real Estate:
* Affordable housing gets a shot in the arm:
The government announced major tax benefits that will help stimulate demand for affordable
housing. Interest deduction up to Rs 3.5 lakh for affordable housing (priced. This can help
attract first-time homebuyers. Further, nearly 1.95 crore houses are proposed to be provided to
eligible beneficiaries under PMAY-Grameen between FY20 to FY22.
The FM underscored that the completion of houses that previously required 314 days/house in
2015-16 has come down to 114 days since 2017. If so, the target of Housing for All certainly
looks a bit more achievable. The government has set for itself a gruelling target under the
Housing for All initiative.
* Infrastructure development push:
As expected, a major boost has been given to infrastructure development via all forms of
physical connectivity including industrial corridors, dedicated freight corridors, railways and
airways. The government plans to invest over INR 100 lakh crore in the sector over the next five
years. This will significantly benefit real estate and particularly increase demand
forlogistics and warehousing. However, actual benefit will depend on its on-ground
implementation.
Another positive within the sector includes the development of nearly 30,000 km roads using
green technology by recycling plastic. This can bring down the cost of road deployment and
Page 17 of 63increase the sustainability quotient of a process which otherwise has serious environmental
implications.
* Rental housing may soon shed its 'poor cousin' status:
The FM called out the old rental laws archaic and stated that the government will soon
formalize a modern tenancy policy and share it with all states. Clear-cut incentives to boost
rental housing via a sound policy will positively help the government to further strengthen its
Housing for All initiative. We await further announcements on this critical policy intervention.
* Retail sector benefits:
Easing the registration process for small retailers and further simplifying the local sourcing
norms for single-brand retail will benefit the retail sector in the times to come, and help the
unorganized retail sector become more competitive.
* Boost to Student Housing:
The government's plan to launch a 'Study in India' programme to attract foreign students in
higher education - for which it allocated INR 400 crore in FY20 - will inevitably create
more demand for student housing. This is one of the best alternative asset class within the
residential sector.
* The government's plan to develop 17 iconic tourism sites as world-class tourist centres will
help boost the flow of domestic and foreign tourists to these destinations. It is a major positive
for the hospitality sector.
* The regulation authority of housing finance companies has now been moved
from NHB to RBI. This will help create more transparency, eliminate anomalies and improve
overall regulation.
On the Flipside
From the real estate perspective, the budget did not meet many expectations as it failed to
address the sector's most pressing concerns. We may not see consumers and investors return to
the market in sufficient numbers - barring in affordable housing. The all-important „industry
status' remained elusive, taxes were not sufficiently moderated and land reforms were not
mentioned at all.
* Tax benefits to homebuyers and investors: The deduction limits on principal and interest
repayments under Section 80C and 24(b) respectively were last increased in 2014 after a hiatus
of a decade. It was widely anticipated that the FM will try and revive consumer sentiments by
increasing these tax exemption limits. The fact that these remained untouched is a definite
sentiment dampener for many including real estate.
* Investor sentiment will remain subdued: To revive the ailing real estate sector and ease the
liquidity crisis, the government has to revive investor sentiment. However, Budget 2019-
20 failed to announce sufficient key initiatives and measures to bring investors back to the real
estate market and thereby help pump some badly-needed liquidity into the system.
* Pre-budget, there were strong indications that the Centre would create a stress-asset fund to
get work started on the stuck projects and provide relief to cash-starved developers as well as
aggrieved homebuyers. The fact that it did not materialize is a major disappointment
* Increase in customs duty on various raw materials such as PVC, vinyl floor etc. may
put additional pressure on the pricing of residential real estate.
* ITC benefit in GST left out: Without ITC benefits, builders suffer a major cut in their profit
margins. Not only are the consequent losses offset by higher prices to buyers, but they also
result in a curtailed supply pipeline which does not bode well for amenable pricing going
forward
By: Anuj Puri, Chairman - ANAROCK Property Consultants
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Page 18 of 63Newspaper/Online The Telegraph
Date July 06, 2019
Link https://www.telegraphindia.com/business/union-budget-double-vision-to-
kickstart-growth/cid/1693880?ref=business_business-page
Union Budget: Double vision to kickstart growth
The pitch is set, the players are ready. EY explores the captain‟s match strategy
fter the pre-election interim budget in February 2019, finance minister Nirmala Sitharaman presented
her maiden budget on July 5 .
She mentioned that the government has showed by deeds that the principle of “Reform, Perform and
Transform” can succeed and then put forward the government‟s vision of becoming a $5 trillion
economy by 2025. Though a lot of chords were touched, the budget seemed to be more focussed
towards boosting the infrastructure and foreign investments to push economic growth in India. Few
key highlights of the budget are:
Considering substantial investment of Rs 50 lakh crore required for the development of railway
infrastructure, the government proposes to use the public-private partnership model. The government
has also proposed the PPP model for enhancing the metro railway initiatives and ensuring the
completion of sanctioned works, while supporting transit oriented development to ensure commercial
activity around transit hubs.
The government is also focused to develop inland waterways to shift a significant portion of inland
cargo movement from road and rail. This will also help to decongest heavy reliance on roads and
railways.
Housing for all
In order to provide further impetus for realisation of government‟s goal of housing for all and
affordable housing, an additional tax-deduction of up to Rs 1,50,000 is proposed for interest paid on
loans borrowed up to March 31, 2020 for purchase of an affordable house valued up to Rs 45 lakh.
Therefore, a person purchasing a self-occupied affordable house will now get an enhanced interest
deduction up to Rs 3.5 lakh. The finance minister has mentioned that this will translate into a benefit
of around Rs 7 lakh to the middle-class home-buyers over the loan period of 15 years.
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Start-ups push
To boost start-ups, a new exclusive television programme within the Doordarshan bouquet of
channels shall be started. It is proposed to extend the „Stand-up India Scheme‟ till 2025 for further
success in bringing about the entrepreneurship qualities from women, scheduled castes/ tribes. From
the tax perspective, certain clarifications and incentives have been given to start-ups to foster growth
of aspiring entrepreneurs in their initial phase of business. Among other tax benefits, start-ups will not
be subjected to IT scrutiny where certain declarations are made in return. Also, early resolution and
positive steps are proposed for pending assessments.
This is aimed at fulfilling the government's Make in India policy and hence encouraging more and
more people to start their own business in a digitalised manner.
Education sops
The government also proposes to bring in a New National Education Policy to transform India's
higher education system. With the purpose of attracting foreign students to India for higher education,
the government proposes to start „Study in India Programme‟. With a vision to bring greater
autonomy and focus on better academic outcome, the government will present draft legislation in the
next year for setting up a Higher Education Commission of India.
Corporate tax cut
On the corporate tax front, the reduced tax rate of 25 per cent has been extended to companies having
turnover of more than Rs 400 crore. As per FM speech, 99.3 per cent of the taxpaying companies will
be able to enjoy the reduced rate. On the other hand, the policy of the government of bigger shoulders
should bear heavier weight has been further fortified by increasing the surcharge rate on super-rich in
the income bracket of Rs 2 crores to Rs 5 crore and more that Rs 5 crore to 25 per cent and 37 per
cent, respectively (i.e. effective increase in overall tax rates by 3 per cent and 7 per cent
approximately).
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Digital drive
FM has also taken a number of steps to encourage digital transactions and discourage the use of cash,
both for large and small value transactions. Businesses having an annual turnover above Rs 50 crore
have to make transactions using digital means (such as BHIM, UPI, Aadhaar Pay, NEFT, RTGS), on
which Merchant Discount Rates and other charges have been eliminated. Cash withdrawals above Rs
1 crore per annum from a single bank account will attract a TDS of 2 per cent.
This will discourage business transactions in cash and also the withdrawal of cash from the banking
system - hence providing another fillip towards a cashless economy. Proposal to introduce 20 rupees
coins would discourage cumbersome transactions of low values, hence prompting a push towards
digital means, which are a convenient means for making even low value transactions.
The move of the Government to make Aadhaar and PAN interchangeable shall ensure more
transparency as it shall enable taxpayers who do not have a PAN to file Income Tax Returns using
their Aadhar Number.
The Government has laid down a vision to make a „Pollution free India with green Mother Earth and
Blue Skies‟ and simultaneously encourage employment in India by promoting „Make in India‟. In line
with the same, the Government has envisaged India to be the global hub to make electric vehicles. To
boost manufacturing of electric vehicles in India, it has taken initiatives to lower the GST rate on
electric vehicles from 12 per cent to 5 per cent.
To further incentivise, customs duty is being exempted on certain parts of electric vehicles. Also, to
make electric vehicle affordable to consumers, it is proposed to allow additional income-tax deduction
of Rs 1.5 lakh on the interest paid on loans taken to purchase electric vehicles.
In order to improve the index of doing business in India and making India a manufacturing hub,
Government stated that 2 fold initiatives are imperative i.e. attracting capital inflows from global &
local investors and easing processes & removing uncertainties at an operating level.The Government
is contemplating organizing an annual Global Investors Meet in India, to get all three sets of global
players: (a) top corporate honchos, (b) top pension funds, and (c) top digital technology/venture funds.
In order to make India a more attractive FDI destination, 100% FDI will be permitted for insurance
intermediaries and relaxation is proposed for media & aviation sectors. Local sourcing norms will be
also eased for FDI in Single Brand Retail sector. At present, single brand retailer making foreign
investment beyond 51% are required to meet locally sourcing norms such as 30% of the value of
goods purchased will be done from India preferably from MSMEs, village and cottage industries,
artisans and craftsmen, in all sectors. The Government has promised to simplify the KYC norms for
Foreign Portfolio Investors. This will encourage them to bring in more investments into the country.
The proposals, if implemented successfully, would lead to a significant inflow of funds into the
country which will make India a better business place and boost the confidence of the investors.
Page 23 of 63To sum up, the key highlights of the budget are around structural reforms, relaxing FDI norms in
certain sectors, boosting start-ups, promoting cash-less economy and giving an impetus to Digital
India/ Housing for All etc. and it initiates a road-map for the future Modi 2.0.
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Page 24 of 63Newspaper/Online ET Realty (online)
Date July 06, 2019
Link https://realty.economictimes.indiatimes.com/news/industry/fpis-can-
subscribe-to-listed-debt-securities-issued-by-reits-finance-minister/70099800
FPIs can subscribe to listed debt securities issued by REITs: Finance
Minister
Presenting her maiden Union Budget, Sitharaman said that an important determinant of
attracting cross-border investments is availability of investible stock to the foreign portfolio
investors (FPIs).
Finance Minister Nirmala Sitharaman said on Friday that foreign portfolio investors (FPIs) will be
permitted to subscribe to listed debt securities issued by the Real Estate Investment Trusts (REITs)
and the Infrastructure Investment Trust (InvITs).
Presenting her maiden Union Budget, Sitharaman said that an important determinant of attracting
cross-border investments is availability of investible stock to the foreign portfolio investors (FPIs).
"Encouragement to foreign institutional investors to subscribe in REITs and InvITs will help in
transforming the commercial realty market which is at present coming out of the liquidity crunch,"
said Sakshi Katiyal, Chief Executive Officer at Home & Soul.
"This issue assumes greater significance in view of the gradual shift from stock targeted investments
towards passive investment whereby funds track global indices, composition of which depends upon
available floating stock," Sitharaman said.
"Accordingly, I propose to increase the statutory limit for FPI investment in a company from 24 per
cent to sectoral foreign investment limit with option given to the concerned corporates to limit it to a
lower threshold. FPIs will be permitted to subscribe to listed debt securities issued by ReITs and
InvITs," she said.
New and innovative financial instruments have been launched in the last five years like InvITs, REITs
as well as models like toll-operate-transfer (ToT) as part of the brownfield asset monetisation strategy
for augmenting infrastructure investment, she said.
"India has had reasonable success in brownfield asset monetisation and several InvITs and one REIT
transaction have already been completed. Additionally, the National Highway Authority of India
(NHAI) carried out one ToT transaction as well. The cumulative resources garnered through these
instruments and model exceed Rs 24,000 crore," Sitharaman said in her Budget speech.
Commenting on the announcement, Chintan Patel, Partner, Deal Advisory, and Head, Building,
Page 25 of 63Construction & Real Estate, KPMG India, said that allowance of FPIs to subscribe to listed debt
securities under REITs and InvITs mechanisms will further boost foreign investor participation.
Surendra Hiranandani, Director, House of Hiranandani, said that the decision to allow foreign
institutional investors to subscribe to REITS and INVITs is a welcome move.
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Page 26 of 63Newspaper/Online ET Realty (online)
Date July 05, 2019
Link https://realty.economictimes.indiatimes.com/news/allied-industries/india-
gives-rbi-more-power-to-regulate-housing-finance-companies/70090115
India gives RBI more power to regulate housing finance companies
The Reserve Bank of India will now be the regulator of housing finance firms, replacing the
National Housing Bank.
India announced measures to strengthen oversight of the country‟s shadow banks and improve their
access to funding by providing guarantees for purchases of their assets.
The Reserve Bank of India will now be the regulator of housing finance firms, replacing the National
Housing Bank, Finance Minister Nirmala Sitharaman said during her budget speech on Friday.
The government will also provide a one-time partial credit guarantee for loan losses to state banks that
buy as much as 1 trillion rupees ($14.6 billion) of high-rated pooled assets of non-banking finance
companies, Sitharaman said.
The decision follows concerns that a broader financial crisis may emerge as firms like Dewan
Housing Finance Corp. and Anil Ambani‟s Reliance Capital Ltd. struggle to find fresh funding. The
cash crunch at such firms could weaken the financial system and economy given their large lending
role and ties with banks, mutual funds and insurers.
The credit guarantee announcement pushed up shares of NBFCs. Mahindra & Mahindra Financial
Services Ltd. and L&T Finance Holdings Ltd. jumped more than 5%, while Shriram Transport
Finance Co. rose more than 3%.
“NBFCs that are fundamentally sound should continue to get funds from banks and mutual funds
without being unduly risk averse,” Sitharaman said.
The crisis emerged a year ago when Infrastructure Leasing & Financial Services defaulted on a series
of debt obligations. Since then, banks and mutual funds have reduced their exposure to the industry,
causing shadow lenders to restrict new loans.
India has more than 9,000 NBFCs, of which about 350, including deposit-taking firms, are listed as
systemically important by the RBI. While NBFCs typically haven‟t been as tightly regulated as banks,
that is now changing.
The RBI has proposed plans to tighten NBFCs‟ asset-liability management and liquidity coverage
ratios. It has also resisted demands from within the industry to provide a separate liquidity window for
NBFCs.
Page 27 of 63RBI Governor Shaktikanta Das said in a speech last month that the central bank will take more steps
to monitor NBFCs closely, including more frequent supervision of their books.
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Page 28 of 63Newspaper/Online ET Realty (online)
Date July 05, 2019
Link https://realty.economictimes.indiatimes.com/news/industry/budget-2019-
imposes-tds-on-parking-charges-maintenance-fees-if-buying-house/70096085
Budget 2019 imposes TDS on parking charges, maintenance fees if
buying house
Currently, these charges were excluded while calculating the amount of tax to be deducted at
the time of making payment for the property.
Charges such as club membership fees, car parking fees, electricity and water facility fees,
maintenance fee, advance fee etc. will soon need to be added into the cost of buying property amount
while determining the amount of tax to be deducted at the time of making property. This amendment
will come into effect from September 1, 2019.
Currently, these charges were excluded while calculating the amount of tax to be deducted at the time
of making payment for property. Only amount paid for buying a house is considered to determine the
amount of tax to be deducted.
Shalini Jain, Tax partner, EY India says, "A buyer is required to deduct TDS at the rate of one per
cent of purchase price while purchasing an immovable property of more than Rs 50 lakhs. Effective 1
September 2019, the limit of Rs 50 lakhs would be towards consideration of the immovable property
including all other charges incidental to the purchase of immovable property such as parking fee,
society fee, club membership fee paid by the buyer. Earlier, due to lack of clarity, the limit of Rs 50
lakhs was considered towards the purchase price of the immovable property only and such additional
charges were not considered."
As per current income tax laws, TDS has to be deducted at one per cent by the buyer if the value of
property exceeds Rs 50 lakh.
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Page 29 of 63Newspaper/Online ET Realty (online)
Date July 05, 2019
Link https://realty.economictimes.indiatimes.com/news/residential/government-
aims-to-build-1-95-crore-houses-under-pmay-gramin-in-two-years/70090214
Government aims to build 1.95 crore houses under PMAY-Gramin in
two years
In the second phase of PMAY-Gramin, 1.95 crore houses will be provided to eligible
beneficiaries, during 2019-20 to 2021-22. These houses will have amenities such as LPG,
electricity and toilets, she said.
Finance Minister Nirmala Sitharaman Friday said the government will build 1.95 crore houses under
the Pradhan Mantari Awas Yojna (PMAY) - Gramin over the next two years. Presenting her maiden
Budget, Sitharaman said that the Narendra Modi government keeps "Gaon, Garib and Kisan at the
centre" of everything it does.
She further said that the time taken to complete construction of houses under the PMAY is reduced to
114 days from 314 days in 2015-16 due to use of direct benefit transfer (DBT) platform.
In the second phase of PMAY-Gramin, 1.95 crore houses will be provided to eligible beneficiaries,
during 2019-20 to 2021-22. These houses will have amenities such as LPG, electricity and toilets, she
said.
The minister further said that by 2022, every single rural family except those who are unwilling to
take the connection will have an electricity and a clean cooking facility.
Talking about rural roads, Sitharaman said Pradhan Mantri Gram Sadak Yojana - Phase 3 envisaged
to upgrade 1.25 lakh km of road length at an estimated cost of Rs 80,250 crore.
All-weather road connectivity has been provided to more than 97 per cent of eligible and feasible
habitations and it is made possible by a high pace of road construction, she said.
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Page 30 of 63Newspaper/Online ET Realty (online)
Date July 05, 2019
Link https://realty.economictimes.indiatimes.com/news/residential/budget-2019-
affordable-housing-gets-further-boost-liquidity-concerns-may-ease/70093196
Budget 2019: Affordable housing gets further boost, liquidity concerns
may ease
For affordable housing, the Budget has proposed a further tax deduction of Rs 1.5 lakh for
interest paid on housing loans sanctioned in the current fiscal year up to March 31, 2020
Finance Minister Nirmala Sitharaman has given a boost to affordable housing with additional tax
benefits for first-time homebuyers in the Union Budget for 2019-20. This, along with the proposed
rental housing policy, is expected to enhance housing supply.
Additionally, the Budget has proposed a one-time provision to enable public sector banks to buy high-
rated pooled assets worth Rs 1 lakh crore from financially sound non-banking finance companies,
supported by a partial credit guarantee by the government for six months. This is expected to ease
liquidity pressure faced by the sector.
For affordable housing, the Budget has proposed a further tax deduction of Rs 1.5 lakh for interest
paid on housing loans sanctioned in the current fiscal year up to March 31, 2020. This is applicable
for homes priced below Rs 45 lakh in tier II, III and peripheral areas of metros. It is expected to
provide a total benefit of Rs 7 lakh for loan tenures of up to 15 years.
“Additional tax benefit offered to affordable housing is expected to push sales in smaller cities and
towns. Re-capitalisation of public sector banks and Rs 1 lakh crore credit guarantees to banks for
purchasing pooled assets of sound NBFCs may ease the current liquidity constraints,” said Satish
Magar, President of real estate industry body CREDAI National.
Currently, interest payments of up to Rs 2 lakh are allowed as tax deduction for all segments of
housing, while housing loan principal repayments up to Rs 1.5 lakh are exempted.
Terming the current system of rental regulation as “archaic”, Sitharaman said the government was
working on a model tenancy law that would be finalized and passed on to states soon.
The model tenancy regulation is likely to enhance housing supply in metros through schemes for
rental housing projects that have remained a non-starter so far, and is also likely to promote a
structured rental housing market.
“Rental housing policy will be a big boost for the industry as well as the government‟s objective of
housing for all, as this will offer supply options through rental housing supply, apart from ownership,”
Page 31 of 63said Niranjan Hiranandani, National President of the National Real Estate Development Council
(NAREDCO).
In a bid to augment housing supply, the government has also proposed to develop public infrastructure
and affordable housing on land owned by central ministries and central public sector enterprises
through joint development and concession.
As part of its efforts to achieve „Housing for All by 2022‟, the government has proposed to provide an
additional 1.95 crore houses to beneficiaries under the second phase of the Pradhan Mantri Awas
Yojna (PMAY) between 2020 and 2022. It has already provided 1.54 crore houses to beneficiaries
under the first phase of the PMAY.
Under PMAY (Urban), the government has given financial assistance worth more than Rs 4.83 lakh
crore for the construction of 81 lakh houses. Of these, over 24 lakh houses have already been allotted
to beneficiaries.
Due the upgraded technology, construction of houses is now taking just 114 days against 314 days
earlier, Sitharaman said.
_____________________________________________________________________________
Page 32 of 63Newspaper/Online ET Realty (online)
Date July 05, 2019
Link https://realty.economictimes.indiatimes.com/news/industry/several-reforms-
would-be-undertaken-to-promote-rental-housing-finance-minister/70093944
Several reforms would be undertaken to promote rental housing:
Finance Minister
Current rental laws are archaic as they do not address lessor-lessee relationships fairly," said
Nirmala Sitharaman.
Union Finance Minister Nirmala Sitharaman on Friday said the Centre would take substantial steps to
promote rental housing for which government would make amendments in the existing rental laws.
Presenting her maiden budget in the Lok Sabha, she calling the rental laws archaic.
"Several reforms would be undertaken to promote rental housing. Current rental laws are archaic as
they do not address lessor-lessee relationships fairly." she said adding that the new tenancy rules
would be shared with the states.
______________________________________________________________________________
Page 33 of 63Newspaper/Online ET Realty (online)
Date July 05, 2019
Link https://realty.economictimes.indiatimes.com/news/industry/budget-2019-tax-
sop-on-home-loans-tax-holiday-for-affordable-housing-push-to-rental-
housing/70090357
Budget 2019: Tax sop on home loans, tax holiday for affordable housing
& push to rental housing
For realisation of the goal of „Housing for All‟ and affordable housing, the FM announced a tax
holiday on profits earned by developers of affordable housing.
Trying to provide a further impetus to the ailing housing sector, Finance Minister Nirmala
Sitharaman on Friday allowed an additional deduction of up to Rs 1,50,000 on interest paid on home
loans borrowed up to March 31, 2020 for purchase of an affordable house valued up to Rs 45 lakh.
This will be in addition to the existing interest deduction of Rs 2 lakh, the FM said in her Budget
speech.
With this, a person purchasing an affordable house will now get an enhanced interest deduction up to
Rs 3.5 lakh, Sitharaman said in her Budget speech. This move is expected to translate into a benefit of
around Rs 7 lakh to middle-class homebuyers over their loan period of 15 years.
In order to align the definition of affordable housing in the Income-tax Act with GST Act, the Finance
Minister proposed to increase the limit of carpet area from 30 square meters to 60 square meters in
metropolitan regions and from 60 square meters to 90 square meters in non-metropolitan regions.
Sitharaman also proposed to provide the limit on the cost of an affordable house at Rs 45 lakh in line
with the definition under the GST Act.
For realisation of the goal of „Housing for All‟ and affordable housing, the FM announced a tax
holiday on profits earned by developers of affordable housing.
Among other measures announced to lift housing sectors, the Finance Minister shifted the base year
for holding period to calculate long-term gains from immovable property to 2001 from 1981. The
holding period for calculating long-term gain on immovable property was reduced from 36 months to
24 months, while a safe harbour of 5 per cent on stamp duty value was provided for the purpose of
computation of capital gains on immovable property.
In a move to promote rental housing, the Finance Minister said several reform measures would be
taken up to promote rental housing. "The current rental laws are archaic as they do not address the
relationship between the lessor and the lessee realistically and fairly. A Model Tenancy Law will be
finalised and circulated to the states soon," she said.
Page 34 of 63KEY HIGHLIGHTS
Deduction of interest on loan taken to purchase self-occupied house property was increased from
Rs. 1.5 lakh to Rs 2 lakh.
100% deduction was provided for the income of affordable housing projects.
The base year for computation of long-term capital gains was shifted from 1981 to 2001.
Holding period for long-term gain on immovable property was reduced from 36 months to 24
months.
Safe harbour of 5 per cent on stamp duty value was provided for the purpose of computation of
capital gains on immovable property.
The Budget announcements though failed to cheer realty stocks. At 2.41 pm, shares of Prestige
Estates were trading 4.78 per cent lower at Rs 273.95. Oberoi Realty, Mahindra Life and Phioenix
Realty fell between 2 per cent and 4.75 per cent.
DLF fell 1.52 per cent to Rs 191.55. Indiabulls Real Estate and Godrej Properties also declined half-a-
per cent each. Sobha and Omaxe bucked the trend rising 1.86 per cent and 0.10 per cent, respectively.
"On many fronts, this was a favorable and bold Budget for the real estate industry. A massive boost
for infrastructure will not only benefit the realty sector, but also help other industries and create large-
scale employment in the economy. The government‟s focus on infrastructure development of tier 2
and 3 cities will surely make these cities ready for next round of urbanization," said Surendra
Hiranandani, Founder & Director, House of Hiranandani.
Among the notable announcements for the real estate sector was the additional Rs 1.5 lakh deduction
in income-tax on home loans up to Rs 3.5 lakh for affordable housing. This will drive the much-
needed urgency in sales and bring the fence-sitters back into the market soon. In view of the housing
shortage in the country and the objective 'Housing for All by 2022', the announcement of new reforms
for rental housing will be a big boost to the sector. Currently high cost of houses and high property
taxes lead to a low rate of return (ROR) from rental housing, making renting out an un-remunerative
proposition. The new model tenancy is expected to balance the rights and responsibilities of both
landlords and tenants that will make the rental market more efficient and streamlined across the
country. Moreover, the use of government‟s land parcels for public infrastructure and affordable
housing shall further narrow the demand-supply gap. The decision to allow foreign institutional
investors to subscribe to REITS and INVITs is also a welcome move," he said.
While the government has taken several concrete measures, there is still a long way to go. We hope
that the government looks into some of the key concerns raised by the industry and addresses the same
soon, he added.
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Page 35 of 63Newspaper/Online ET Realty (online)
Date July 05, 2019
Link https://realty.economictimes.indiatimes.com/news/regulatory/budget-2019-
hikes-tax-break-on-interest-paid-on-loan-for-affordable-housing-by-rs-1-5-
lakh/70090269
Budget 2019 hikes tax break on interest paid on loan for affordable
housing by Rs 1.5 lakh
Deduction that can be claimed for interest paid on loans for affordable housing was increased
by Rs 1.5 lakh.
Budget 2019 proposes to increase the deduction that can be claimed for interest paid on loans taken
for affordable housing by Rs 1.5 lakh to Rs 3.5 lakh per annum for houses valued up to Rs 45 lakh.
The deduction is available on loans taken up to March 31, 2020. This will provide a total benefit of Rs
7 lakh over a loan period 15 years.
The Finance Minister said in her budget speech: "For realisation of the goal which is housing for all
and affordable housing, a tax holiday has already been provided on the profit earned by developers of
affordable housing. Also interest paid on housing loan is allowed as a deduction to the extent of Rs 2
lakh in respect of self occupied property. In order to provide further benefit, I propose to allow an
additional deduction of Rs 1.5 lakh for interest paid on loans taken upto 31st March 2020 for a
purchasing an affordable house upto Rs 45 lakh in value. Therefore, a person purchasing an affordable
house now will get an enhanced interest deduction up to Rs 3.5 lakh. This will translate in to benefit
of Rs 7 lakh to the middle class home buyers over a loan period of 15 years."
"This proposal will benefit the middle-class first time home owners who will now get enhanced
deduction of Rs 1.5 lakh (over and above the existing deduction of Rs 2 lakh) on account of interest
on housing loan for a house valued upto Rs 45 lakh if the loan is taken before 31st March 2020. This
proposal will also provide a boost to the housing sector," Shalini Jain , Tax Partner, EY India
Former Finance Minister Piyush Goyal in his interim budget 2019 speech had announced exemption
from income tax on the notional rent from second house property. In addition to that, one can also
invest capital gains of up to Rs 2 crore arising from sale of house in two house property instead of
one, as per the interim budget. However, this benefit is available only once in a lifetime.
At present, for a self-occupied house, one can avail a tax break on the principal amount repaid on
the home loan as well as the interest paid on it. Under Section 80C of the Income Tax Act you get a
deduction for the principal (of the loan) repaid up to Rs 1.5 lakh a year and the interest paid is
deductible up to Rs 2 lakh per annum under section 24. These deductions are allowed from the gross
total income before calculation of tax, thereby reducing the total tax payable.
Budget 2017 had changed the tax incidence for houses that are let-out on rent or are considered to be
Page 36 of 63on rent (Deemed let-out). From FY 2017-18, the 'loss from house property' was restricted to Rs 2 lakh
per annum for rented houses and 'deemed to be let-out' houses. This move put a limit on the amount of
interest paid on a home loan that can be claimed as a set off in case of 'rented/deemed to be rented'
house. This, thereby, has effectively reduced the tax benefit that an individual gets from the interest
paid on home loan in the above mentioned case.
The unadjusted loss from house property can be carried forward for eight assessment years but can
only be set off against income from house property.
In addition, home buyers availing home loans in FY 2016-17 were allowed to claim an additional tax
benefit of up to Rs 50,000 under section 80EE of the Income Tax Act. The deduction is over and
above the limit of Rs 2 lakh, provided it is for a self-occupied property.
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Page 40 of 63
OTHER NEWS
Newspaper/Online ET Realty (online)
Date July 05, 2019
Link https://realty.economictimes.indiatimes.com/news/regulatory/bill-passed-to-
exempt-property-tax-on-afforested-land-in-kolkata/70091330
Bill passed to exempt property tax on afforested land in Kolkata
According to the bill, a person will be exempted from property tax if his or her land - vacant or
with a building on it - has been kept or preserved in such a manner that it helps in maintaining
ecological balance of the locality.
To encourage people to plant trees in the municipal area of Kolkata, the West Bengal
Assembly Thursday passed a bill for exemption of property tax on land where afforestation is done.
The Kolkata Municipal Corporation(Amendment) Bill made provisions for exemption of property tax
on various aspects including urban forestation.
According to the bill, a person will be exempted from property tax if his or her land - vacant or with a
building on it - has been kept or preserved in such a manner that it helps in maintaining ecological
balance of the locality.
There are also provisions of exemption of property tax on holdings used for running government-
owned or sponsored hospitals and clinics.
Some other provisions were also made in the passed bill to enable the authorities to make the tax
assessment procedures smoother for the benefit of tax payers.
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Page 41 of 63Newspaper/Online ET Realty (online)
Date July 06, 2019
Link https://realty.economictimes.indiatimes.com/news/residential/sc-seeks-
centres-proposal-on-ways-to-complete-stalled-unitech-projects/70099825
SC seeks centre's proposal on ways to complete stalled Unitech projects
The Unitech Ltd resisted the suggestion that the pending projects be handed over to a third
party like the NBCC and said they were not able to deliver even in the case of Amrapali,
another embattled real estate major.
The Supreme Court Friday directed the Centre to come up with a proposal for construction of stalled
projects of embattled real estate major Unitech Ltd within ten days, so that over 16,000 hassled
homebuyers are not left in lurch. The top court said that the Centre should suggest the modalities and
name of the third-party agency like the National Buildings Construction Corporation (NBCC) Ltd
which could construct the pending projects of Unitech Ltd in a time bound manner.
The Unitech Ltd resisted the suggestion that the pending projects be handed over to a third party like
the NBCC and said they were not able to deliver even in the case of Amrapali, another embattled real
estate major.
A bench of justices D Y Chandrachud and M R Shah was told by Attorney General K K Venugopal
that a third party could be involved in the construction of pending projects and a high-powered
committee headed by a retired high court judge could oversee the construction.
Venugopal said that after consulting with the officials concerned, he can suggest the modalities which
can be approved by the court accordingly.
Senior advocate Abhishek Manu Singhvi, appearing for Unitech, said that they have delivered over
17,000 flats out of 29,000.
"Despite all odds, in a total of 74 projects, we have completed over 70 per cent of the work and
Page 42 of 63handed over 17,000 flats to homebuyers," Singhvi said.
He said that handing over of the projects to a third party would not serve any purpose as the court had
seen the work of the NBCC in the Amrapali matter.
Singhvi suggested a plan for completing the pending projects and said that the entire work will be
completed in the next three years.
"The homebuyers who are before us invested their money some 10-12 years back and now you are
proposing another three years for completing the projects. Question is for how long do these
homebuyers wait," the bench said.
It said that Unitech was saying that the NBCC should not be trusted but the fact is the real estate firm's
plan is such that it does not inspire any confidence and it is subject to availability of funds from a third
party.
"We can't keep the homebuyers who have approached us in lurch. The NBCC is accountable to the
government and the government is accountable to its people. We want someone who can be held
accountable. As the attorney general has said we will wait for the government to come up with some
kind of proposal for completing the pending projects," the bench said.
The court rejected the application of Unitech Ltd in which they sought court's permission to continue
with the construction of the pending projects.
The bench also granted two weeks' time to the senior officials of the Unitech Ltd to cooperate with the
forensic auditors and provide them with all necessary details.
It asked the forensic auditors to submit their reports in four weeks and posted the matter for further
hearing on July 23.
On May 9, the apex court, irked over the non-cooperation of Unitech in the forensic audit, had
withdrawn all the facilities given to its promoters, Sanjay Chandra and his brother Ajay Chandra who
are lodged in Tihar jail for allegedly siphoning off homebuyers' money.
Page 43 of 63The top court had said the Chandra brothers should be treated like ordinary prisoners as per the prison
manual of Tihar jail here where they have been lodged since 2017.
In 2017, the apex court had directed the jail authorities to facilitate the Chandras' meeting with their
company officials and lawyers so that they are able to arrange the money for refunding homebuyers as
well as for completing the ongoing housing projects.
The court had earlier sought assistance of the attorney general while warning that it could order a CBI
probe.
The court had said it would also like to hear from the attorney general on whether the government can
take over the management of Unitech Group and its subsidiaries to protect the interest of
homebuyers.
The apex court had on January 23 refused to grant bail to the Chandra brothers. It said they had not
complied with the October 30, 2017 order which asked them to deposit Rs 750 crore with the court
registry by December 31, 2017.
The court had directed the trial court which is seized of the criminal case against the Unitech
promoters to proceed expeditiously in the trial.
The Chandras sought bail on the ground that they were complying with the apex court order and had
deposited around Rs 481 crore till now.
On December 7, 2018, the apex court has directed a forensic audit of Unitech Ltd and its sister
concerns and subsidiaries by Samir Paranjpe, Partner, Forensic and Investigation Services in M/s
Grant Thornton India.
_________________________________________________________________________________
Page 44 of 63Newspaper/Online ET Realty (online)
Date July 06, 2019
Link https://realty.economictimes.indiatimes.com/news/residential/deliver-flats-in-
time-bound-manner-unitech-homebuyers/70099849
Deliver flats in time-bound manner: Unitech homebuyers
“After over a decade of uncertainty, there finally seems to be a ray of hope,” said Chetan Arora,
a homebuyer.
Unitech‟s homebuyers heaved a sigh of relief on Friday as the Supreme Court decided to hand over
the realtor‟s 74 projects in different parts of the country, including Gurugram, to other builders for
completion. However, some investors are uncertain about the fate of projects which have been partly
handed over to homebuyers.
The realtor has over 6,000 undelivered units from a total of 30 projects in Gurugram. Some of the
most delayed projects include Unitech Wildflower Country and Unitech Vistas in Sector 70, and
Uniworld Resorts in Sector 33. Unitech has, however, given possession to buyers in eight of its
projects.
“After over a decade of uncertainty, there finally seems to be a ray of hope,” said Chetan Arora, a
homebuyer.
However, Naveen Kumar, general secretary of the residents‟ association of The Residences project in
Sector 33, said the government needs to ensure those already staying in partially completed projects,
also maintained by Unitech, don‟t face any difficulty.
“In such projects, there is no power connection. Electricity is being provided by gensets. Also, the
unfinished flats need to be delivered in time-bound manner but not later than 18 months,” he said.
Vikram Bishnoi, the president of association, said, “The main concern is now with
the residential complexes whose maintenance in now in the hands of Unitech.”
Sharon Agarwal, a resident of Unitech Sunbreeze in Sector 69, said the apex court must ensure the
flats of “cheated” homebuyers are delivered on priority to save them from double whammy of EMIs
and rents.
“Most buyers are stressed with dual burden of paying EMIs for a dead investment and rental. We
invested in Unitech Sunbreeze as my daughter‟s school was just 3 km away for the project. Over a
decade of wait has completely defeated the purpose of the investment,” said Himanshu Dube, another
Sunbreeze resident.
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Page 45 of 63Newspaper/Online ET Realty (online)
Date July 05, 2019
Link https://realty.economictimes.indiatimes.com/news/allied-industries/dhfl-sells-
office-at-discount-to-charak-pharma-promoters/70088501
DHFL sells office at discount to Charak Pharma promoters
The property with 90,000 sq ft built up area is spread over nearly half an acre, off the Western
Express highway.
Stressed home financier Dewan Housing Finance (DHFL) has sold one of its crucial commercial
properties DHFL House in the Andheri suburb of Mumbai to the promoters of Charak Pharma for Rs
121 crore, way below its current market price, said two persons with direct knowledge of the
development.
The property with 90,000 sq ft built up area is spread over nearly half an acre, off the Western Express
highway. The deal values the building at a little over 13,000 per sq ft, as against the current market
rate of over 18,000 per sq ft.
According to the registration document reviewed by ET, the transaction has been executed by
Essential Hospitality, an associate group company of DHFL. The buyer has also paid stamp duty
worth Rs 7.26 crore for the registration of the deal. The building has a total of 63 car parking slots.
“DHFL had vacated this building around four months ago and is shifting its staff to its Bandra office.
The deal was concluded recently and the building has already been leased by the new owner,” said
one of the persons mentioned above.
Promoters of Charak Pharma have leased the entire building to Book-MyShow India that is in the
process of setting up its own headquarters here.
The ticket company has leased the building at monthly rental of 125 a sq ft. This is a long-term lease
with total tenure of 9 years with a clause to reset rentals every three years. The company is planning to
shift its head office here from the current office in Mumbai‟s Juhu locality.
In addition to this transaction, the cash-strapped non-banking mortgage lender is also looking at
monetizing more assets across western India, especially in Mumbai, to raise funds in a bid to tide over
its liquidity crisis.
ET‟s separate email queries to DHFL, Charak Pharma and Book-MySHow remained unanswered till
the time of going to press.
Page 46 of 63DHFL has been gripped by liquidity crisis after a credit crisis hit the nonbanking finance companies
as a fallout of the Infrastructure Leasing & Financial Services‟ default last year.
ET had reported earlier that lenders to DHFL had agreed to sign an inter creditor agreement (ICA) and
consider a resolution plan to rescue the mortgage lender. DHFL has an outstanding debt of over 1 lakh
crore. Lenders to DHFL are now considering extending the tenure of the current loans and convert
short-term credit to longer tenure debt.
DHFL chairman and managing director Kapil Wadhawan had recently said that the company is in
advanced stages of selling non-core assets and raising over Rs 4,000 crore liquidity over the next four-
five months.
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Page 47 of 63Newspaper/Online ET Realty (online)
Date July 05, 2019
Link https://realty.economictimes.indiatimes.com/news/regulatory/hyderabad-it-
searches-my-home-group-chairmans-offices-and-residence/70093467
Hyderabad: IT searches My Home Group chairman's offices and
residence
Originally began as a real estate company, My Home Group diversified into various sectors.
Jupally Rameshwara Rao is considered close to Telangana chief minister K Chandrashekar
Rao.
Income Tax sleuths on Thursday conducted searches in the offices and residence Jupally Rameshwara
Rao, proprietor of Hyderabad-based My Home Group. He is considered close to Telangana chief
minister K Chandrashekar Rao.
According to sources, the IT officials had come to Rao‟s residence at Nandagiri Hills in the upscale
Jubilee Hills area of the city and the corporate office at Madhapur in the morning and verified
documents pertaining to various transactions of the company. Close to 20 officials divided into three
groups participated in the searches that went till late in the evening.
Originally began as a real estate company, My Home Group diversified into various sectors including
construction, cement manufacturing, power generation, consultancy and education, with an overall
turnover of Rs 3,350 crore.
The group recently acquired majority stakes in the popular multilingual television channels – TV9 as
also 10 TV in Hyderabad.
There have been disturbances in the TV9 board after its take over by the new management. The
management slapped cases against former CEO Ravi Prakash. Another minority share holder, Sivaji
(actor) was also slapped with cases and he was detained at the Shamshabad international airport on
Wednesday when he was trying to leave for United States. He has been asked to appear before the
cyber crimes police on July 11.
The internal differences are said to have resulted in some people alerting the CBI and IT wings.
________________________________________________________________________________
Page 48 of 63Newspaper/Online ET Realty (online)
Date July 05, 2019
Link https://realty.economictimes.indiatimes.com/news/regulatory/kochi-sc-says-
fraud-played-on-court-by-residents-of-maradu-flats/70092465
Kochi: SC says fraud played on court by residents of Maradu flats
On June 10, in a relief for the home owners, the Supreme Court stayed for six weeks the
demolition of the 400 flats.
Senior counsels engaged by the petitioners have played a fraud on the Supreme Court, the apex court
said on Friday while hearing a matter related to the razing of 400 flats in five posh coastal apartment
complexes in Maradu area in Kochi.
Criticizing the petitioners and their senior counsels, a bench comprising justices Arun Mishra and
Navin Sinha said the petitioners had obtained a stay order on the demolition from another bench
during the vacations of the apex court.
On June 10, in a relief for the home owners, the Supreme Court stayed for six weeks the demolition of
the 400 flats.
"That Bench should not have entertained the matter at all," said a furious justice Mishra, targeting the
senior advocates who appeared on the matter.
"Should we draw contempt against you? I had specifically turned down the stay on the demolition,
and then you went to the other bench... Three to four senior counsels are involved in this fraud. Is
money everything for you?" said Justice Mishra asked.
A vacation bench of Justices Indira Banerjee and Ajay Rastogi had passed the order while considering
a writ petition filed by a group of residents, who claimed that their arguments were not heard by the
top court while pronouncing the demolition order on May 8 in view of the findings of the enquiry
committee.
The court dismissed the matter and warned the petitioners not to agitate further.
In May, Supreme Court, in the aftermath of the devastating Kerala floods, ordered the demolition of
all illegal structures built on the notified Coastal Regulatory Zone (CRZ) at the Maradu municipality
in Kerala's Ernakulam District.
In June, the apex court had assured that the review pleas will be heard in the first week of July, and
then the vacation bench ordered a status quo on all demolitions till then.
Page 49 of 63The writ petitioners - the home-owners - said the report had been submitted without giving them any
opportunity and this was not communicated to the court before it reached the decision of demolishing
the flats.
The counsel for the petitioners contended that the Ministry of Environment, Forest and Climate
Change had conveyed its approval of the Coastal Zone Management Plans (CZMPs) regarding 10
coastal districts of Kerala.
However, the approval was pending before the court.
The permission to construct the buildings was granted in 2006 when Maradu was a panchayat.
The builders of two apartments filed review petitions challenging the judgement passed in May and
argued that the court was misled by the Kerala Coastal Zone Management Authority.
The review petitions also said that the court-appointed three-member committee did not give them a
proper hearing.
The apex court, directing the demolition, said the state cannot approve illegal constructions in the light
of the danger of floods and heavy rains.
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Page 50 of 63Newspaper/Online ET Realty (online)
Date July 05, 2019
Link https://realty.economictimes.indiatimes.com/news/regulatory/lucknow-ed-
attaches-four-plots-flat-of-gomti-riverfront-engineers/70091476
Lucknow: ED attaches four plots, flat of Gomti riverfront engineers
The attachment of properties was done under the provisions of Prevention of Money
Laundering Act (PMLA), 2002.
The enforcement directorate (ED) on Thursday attached immovable properties of three engineers of
irrigation department involved in Gomti riverfront development project. The properties include one
plot of superintending engineer Roop Singh Yadav in Noida, a residential flat of chief engineer S N
Sharma in Ghaziabad and three plots of assistant engineer Anil Yadav in Gomtinagar, Madiaon and
Adilnagar, having total value of Rs 1 crore, said ED officials.
The attachment of properties was done under the provisions of Prevention of Money Laundering
Act (PMLA), 2002.
"During investigation, searches were carried out and incriminating documents mentioning amount and
manner of payment of bribes to engineers Roop Singh Yadav, Anil Yadav and S N Sharma, were
seized," an ED official said.
Irrigation engineers used wives as financial fronts
ED officials revealed that the accused engineers had used the financial profiles of their wives to
channelize, place, layer and project illegally earned money in the voluntary Undisclosed Income
Declaration Scheme, 2016 of the Government of India.
Further investigation is in progress and more properties may be attached and the three be prosecuted
for involvement in money laundering.
Earlier, taking cognisance of CBI FIR, ED had in March 2018 filed a criminal case under Prevention
of Money Laundering Act (PMLA) in Rs 1,500 crore Gomti riverfront project scam.
CBI had started probe after the Yogi Adityanath government in Uttar Pradesh had ordered an inquiry
into the project and filed FIR against then chief engineers Gulesh Chandra, S N Sharma, Qazim Ali,
then superintending engineers Mangal Yadav, Akhil Raman, Kamaleshwar Singh, Roop Singh Yadav
and executive engineer Surendra Yadav.
Gulesh Chandra, Mangal Yadav, Akhil Raman and Roop Singh Yadav have since retired.
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