MUMBAI : Mumbai MCHI President Nayan A Shah Views on budget 2020

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MUMBAI : Mumbai  MCHI President Nayan A Shah Views on budget 2020

“Overall not an inspiring budget as far as real estate is concerned”
NAYAN A. SHAH, PRESIDENT, CREDAI – MCHI

Mumbai, February 1, 2020: We welcome the government’s move to encourage infrastructure,
boost economic development through Commerce and Investment to reach 5 trillion Economy but
we are not very satisfied with the budget which lacks measures to boost the real estate sector.
Today everybody knows that real estate is in deep pain and nothing has been given to this industry
by this budget in terms of improving the demand for housing. No measures are seen to make home
purchasing an easy task for customers neither it has eased the development as far as the finance is
concerned, restructuring is concerned. In such a scenario, it is very difficult to produce affordable
housing especially in Mumbai and MMR and encourage more and more people to buy homes in the
affordable segment.
Key Issues
1 we wanted the finance minister to give a direction for the real estate revival which has not come.
2 Announce some moral boosters the savior with you
3 There are lakhs of home buyers, who want to buy a home that they are not able to buy a home. A
little push could have make a big difference.
4 That how can we have a judiciary eco system where within 6 months a case can be decided by a
court.

Highlight Points of Union Budget 2020 related to Real Estate
Industry

  1. Affordable Housing:
    FM Nirmala Sitharaman says for affordable housing, the deduction of Rs 1,50,000 will be
    extended to loan sanction by one year. Tax holiday on profits of developers involved in
    affordable housing projects will be extended by one year to March 2021.
  2. GDP trends
    FM Nirmala Sitharama says, we have estimated nominal growth of GDP for the year 2020-21 on
    the trends available, at 10%. We estimate a fiscal deficit of 3.8% in RE 2019-20 and 3.5% for BE
    2020-21.
  3. Announcement on NBFCs

Mechanism will be made to address liquidity constraints of NBFCs and House finance
corporations. Govt to offer support by guaranteeing securities floated to provide liquidity for
NBFCs: Finance Minister Nirmala Sitharaman

  1. Skill development and jobs
    Huge employment opportunities exist for India’s youth in construction, operation & maintenance
    of infrastructure; ‘Project Preparation Facility; will involve young engineers, management
    graduates and economists from our universities.
  2. Dividend Distribution Tax abolished
    Dividend Distribution Tax to be removed, companies will not be required to pay DDT, dividend
    to be taxed only at the hands of recipients at applicable rates
  3. Govt proposes cut in tax on cooperative societies to 22%
    Finance Minister Nirmala Sitharaman proposed reduction of tax on cooperative societies to 22
    per cent plus surcharge and cess, from 30 per cent at present.
  4. Turnover threshold for audit of MSMEs to be increased to Rs 5 cr
    The turnover threshold for audit of MSMEs to be increased from Rs 1 crore to Rs 5 crore, to
    those businesses which carry out less than 5 percent of their business in cash, the FM said.
  5. Govt to grant 100% exemption for sovereign wealth funds in infrastructure
    Government will grant 100% exemptions for sovereign wealth funds in infrastructure and other
    notified sector with minimum lock-in of three years. The rate of withholding tax has been
    extended to 2023 for FPIs.
  6. Income Tax revised Tax Slabs:
    NEW INCOME TAX SLABS VS EARLIER – NO EXEMPTIONS APPLICABLE
  • 10% for income between Rs 5 -7.5 lakh against 20%.
  • 15% for income between Rs 7.5 -10 lakh against 20%
  • 20% for income between Rs 10-12.5 lakh against 30%
  • 25% for income between Rs 12.5 -15 lakh against 30%
  • 30% for income above Rs 15 lakh

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