Page 60 - Kolte Patil AR 2019-20
P. 60

Government initiatives

            GST reduction: The government    Alternative investment fund: The   capital gains, business profits and other
            announced a reduction of GST on   government set up an alternative   sources in respect of transactions in real
            the housing properties - ~1% in the   investment fund of C25,000 Crore for   estate, if the consideration value is less
            affordable housing segment and ~5%   projects that had been stalled.   than circle rate by more than 5%, the
            for other categories.                                             difference is counted as income both in
                                             Section 80IBA: The benefits were
            Additional deduction on interest:    extended for an additional year for the   the hands of the purchaser and seller.
                                                                              The Government increased the limit of
            The government announced an      affordable housing projects approved by   5% to 10%.
            additional deduction of upto C1.5 Lakh   31 March, 2021.
            on the interest paid on loans that were   Concession to real estate   (Source: Financial Express)
            borrowed until 31 March, 2021.
                                             transactions: While taxing income from

             RERA and its implications

            The Real Estate Regulation Act   of home buyers. For many years, the   suitable environment for the seller and
            (RERA) was passed by the Indian   developers were at an advantage when   buyer. This was introduced with the
            parliament in 2016, with the motive   it came to real estate transactions.   primary motive of make a real estate
            of increasing investments in the real   With the implementation of RERA, the   transaction more transparent.
            estate sector and protecting interests   government wants to create a more

            Few of the important compliances:

                   Informing allottees   Consent of two-third   Restricting marketing    the quality of
                  about minor additions   allottees about any   before registration with   construction due to a
                    and alterations.     addition or alteration.     RERA.            defect liability period
                                                                                          of five years.

                                                                               Sharing all
                                                                             the information
                              Increasing focus on     Consent of two-
                             the timely completion   thirds allottees before   about the project plan,
                             of projects and delivery   transferring majority   layout, government
                                                                             approvals, land
                               to the consumer.      rights to third party.
                                                                             status and sub-

             Key highlights

            Establishment of the regulatory   metres or more than eight apartments   promoter, approvals and schedule of
            authority: The Act established a   in one phase) must be registered with   completion.
            regulatory authority in each state   its respective state’s RERA. While   Reserve account: Primary reason for
            and union territory and its functions   applying for registration, promoters are   delay in the completion of projects was
            included the protection of interest of   required to comply with the registration   that funds collected from one project
            the stakeholders, accumulating data at   requirements (completion certificate or   would get diverted to fund new projects.
            a designated repository and creating a   occupancy certificate) and are required   To prevent such a diversion, promoters
            robust grievance redressal system.  to provide detailed information on   are now required to allocate 70% of
                                             the project (land status, details of the
            Compulsory registration: Every real                               all project receivables into a separate
            estate project (total area of >500 sq.                            reserve account, and it can only be used

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