Finally, the much awaited Union Budget 2009 has been declared. Most of us are happy with the fact that it's largely a people's budget that provides for the common man. The builder fraternity is disappointed that very little has been done for the housing sector that is one of the main drivers of the Indian economy.
However experts say that are some clauses that can impact the real estate sector in a positive way. Here's a look at some of them:
The basic personal income tax exemption limit has been raised for senior citizens by Rs 15,000 and for others by Rs 10,000. "Though it's only a marginal amount, it will help people, especially the senior citizens and those who have just started working," says Mukesh Patel, knowledge worker, Neelkanth Group. This is welcome news for those falling in middle and lower income groups as they will have greater disposable income to pay off their EMIs on bank loans.
Elimination of surcharge
The 10 per cent surcharge on taxes for those earning above Rs 10 lakh per annum has been dissolved. This will help people in the higher income bracket to make big investments like ones in real estate.
Proposed reduction in TDS
"Section 194-I is proposed to be amended with effect from October 1, 2009, and thereafter the TDS paid by licensee will be only 10 per cent++ surcharge/education cess. This is going to have a great impact on owners of commercial property as they will have more money in hand despite paying advance tax. Likewise, if the owner has taken a loan and has to pay EMIs, the additional amount will be useful for him," says Anil Harish, partner, DCM Harish and Co.
Elimination of Fringe Benefit Tax
The abolishment of the Fringe Benefit Tax will add up to the resources of the corporate sector allowing them to invest in property or infrastructure.
Other than the above, the government has also taken allocated sizeable funds towards infrastructure development, storm water drainage project and housing for urban poor under the Jawaharlal Nehru Urban Renewal Mission.
So, while there's nothing concrete in the budget for the real estate sector, we can always hope for something brighter.