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Union Budget 2023 Realtors look forward to tax reforms and incentives

By Rishabh Chamoli | 2023-01-18

The Union Bill provides a blueprint for steering the economy towards a sustained high growth trajectory. Therefore, the developer fraternity suggests some path breaking measures for Budget 2023 that will increase the disposable income in the hands of consumers and create demand.

Realtors have high hopes with the upcoming Union Budget 2023 to 24 as the real estate market has recorded a strong rebound in 2022. The industry continues to gain momentum, and realtors expect better reforms that can boost housing sales. The Budget 2023 will be presented on February 1 by Finance Minister Nirmala Sitharaman at around 11 am.

Union Budget 2023 What are the expected reforms?
Industry reports suggest a few reforms that are required to boost affordability and housing sales. These include

The home loan interest deduction limit decided under Section 24 of the Income Tax (IT) Act of 1961 is Rs 2 lakh per annum. However, the industry expects a Rs 3 lakh increase in the limit, allowing a deduction of Rs 5 lakh. The decision would add momentum to the housing demand amid rising inflation, particularly in the affordable segment.
A simplification in capital gains tax structure is also suggested this year. Additionally, the existing 20 percent capital gain tax is to be reduced. Industry experts also recommend the removal of the Rs 2 crore cap on capital gains reinvestment in two properties to support homebuyers.
Section 54 of the IT Act allows claiming long term capital gains from selling existing property only if the construction is completed within three years of the selling date. However, this must be revisited and given increased timelines.

What does the developer community expect?
According to Amarjit Bakshi, CMD, Central Park, the real estate sector is focusing on sustaining the current growth, and thus further impetus can be given where both homebuyers and developers are encouraged through policy initiatives in the Budget 2023 to 24. The Government must establish city-wise unit size criteria for housing to factor in the realities of the micro markets so that many homebuyers can invest in properties. Besides, the developer community expects the Government to address issues like GST, finance, and policy rationalisation.

The sectors long pending ask of granting industry status and facilitating single window clearance must also be looked into. The timelines for quick approvals by the Government will ensure faster construction and delivery of real estate projects.

The industry has highlighted the most crucial demand of providing tax relief to developers, expediting the completion of stalled projects. Therefore, offering an empathetic recourse to the gradually recovering realty sector.