The real estate sector is the second largest employer after agriculture and experts have stated that the sector is poised to grow around 20 percent over the next decade. The real estate sector comprises four sub sectors – housing, retail, hospitality, and commercial.
Realty is considered to be one of the nation’s most crucial economic engines, which is why the sector has welcomed the investment push by Finance Minister Nirmala Sitharaman in her Budget 2021.
On that note, Mr. Hirav Shah, the Astro Strategist cum Real Estate Astrologer, who has been working closely with many of the leading Developers, Infrastructure, and Real Estate giants of India, USA, UAE etc as a Real Estate Strategist, Real Estate Investment Advisor, Property Investment Advisor says Real estate sector will get huge boost from April 2021.
Meanwhile, the Ministry of Housing and Urban Affairs has been granted Rs 54,581 crore in the Budget 2021.
Hirav Shah’s Astrological Analysis: Saturn is the task master of the zodiac. He stays in one house for 2.5 years. He rules real estate and the construction sector. A strong sub-period of Saturn operative in India’s horoscope till first week of July augurs well for the growth of the real estate sector. The construction industry is likely to see faster growth as delayed infrastructure and real estate projects are likely to be completed. With strong Mercury in India’s chart, the demand for the commercial real estate
segment is likely to shoot up during July-August.
Further, planets have a significant role to play in the purchasing of property. For instance, the Moon enhances the entire aspect of buying or selling a house. Whereas, Mercury governs in an aesthetically pleasing house. In addition, Jupiter rules over how big or small the house will be. On the other hand, Venus governs over the beauty of the place. Thus, the position of these planets rules over what type of house you can have in your lifetime.
Here is what real estate gained in Union Budget 2021-
1.Raising safe harbour limit for primary sale of residential units: In order to incentivise home buyers and real estate developers, it is proposed to increase safe harbour limit from 10% to 20% for the specified primary sale of residential units.
2.REITs: To further ease access of finance to InVITS & REITs, thus augmenting funds for infrastructure & real estate sectors, debt financing of InVITs and REITs by Foreign Portfolio Investors will be enabled by making suitable amendments in the applicable legislations.
In the last Budget, the government had abolished the Dividend Distribution Tax in order to incentivise investment. In the hands of shareholders, the dividend was made taxable.
Now, FM proposed to make dividend payment to REIT/InVIT exempt from TDS, in order to provide ease of compliance.
Further, as the amount of dividend income cannot be estimated correctly by the shareholders for paying advance tax, FM proposed to provide that advance tax liability on dividend income shall arise only after the declaration/payment of dividend.
Also, for Foreign Portfolio Investors, FM proposed to enable deduction of tax on dividend income at lower treaty rate.
3. Affordable Housing: The government provided an additional deduction of interest, amounting to Rs 1.5 lakh, for loan taken to buy an affordable house, in the July 2019 Budget.
Now, the eligibility of this deduction was extended by one more year, uptil March 31, 2022. The additional deduction of Rs 1.5 lakh, shall hence be available for loans taken up till March 31, 2022, for buying an affordable house.
But, the best part was the FM’s proposal which is, affordable housing projects can avail a tax holiday for one more year-till March 31, 2022 and this was proposed to keep up the supply of affordable homes.
Further, The FM proposed to allow tax exemption for notified Affordable Rental Housing Projects, to promote supply of Affordable Rental Housing for migrant workers.
4. Infrastructure: A total of 702 km of conventional metro is operational and another 1,016 km of metro and RRTS is under construction in 27 cities.
Two new technologies i.e., ‘MetroLite’ and ‘MetroNeo’ will be deployed to provide metro rail systems at much lesser cost with the same experience, convenience and safety in Tier-2 cities and peripheral areas of Tier-1 cities.
Centre will provide funding to:
-Kochi Metro Railway Phase-II of 11.5 km at a cost of Rs 1,957.05 crore -Chennai Metro Railway Phase-II of 118.9 km at a cost of Rs 63,246 crore -Bengaluru Metro Railway Project Phase 2A and 2B of 58.19 km at a cost of Rs 14,788 crore
-Nagpur Metro Rail Project Phase-II and Nashik Metro at a cost of Rs 5,976 crore and Rs 2,092 crore respectively
Infrastructure needs long term debt financing. A professionally managed Development Financial Institution is necessary to act as a provider, enabler and catalyst for infrastructure financing. Accordingly, FM will introduce a Bill to set up a DFI. Sitharaman provided a sum of Rs 20,000 crore to capitalise this institution. The ambition is to have a lending portfolio of at least Rs 5 lakh crore for this DFI in three years time.
5. Stressed Asset Resolution: To clean up the bank books, the high level of provisioning by public sector banks of their stressed assets, calls for measures. An asset management company and an asset reconstruction company would be set up to consolidate and take over the existing stressed debt and then manage and dispose of the assets to alternate investment funds and other potential investors for eventual value realization.
NCLT framework will be strengthened, e-Courts system shall be implemented and alternate methods of debt resolution and special
framework for MSMEs shall be introduced, to ensure rapid resolution of cases.
6.Construction Workers: The FM proposed to launch a portal that will collect relevant information on gig, building, construction workers and labourers among others, to further extend Government’s efforts towards the unorganised labour force migrant workers, particularly. This will certainly help formulate food schemes, credit, insurance, housing and most importantly health, for migrant workers.
7.LED Lights : Custom duty has been increased on inputs and parts of LED lights or fixtures including LED Lamps from 7.5% to 10% and on solar lanterns or solar lamps from 5% to 15%.
At this juncture, one can hope that as India is leading by example on COVID inoculations, it will show similar resolve on the way for
economic revival, thus enabling not only India’s growth but also create a lasting impact on the global arena.
So in conclusion, Budget 2021 is 10 out of 10 rating for the Real Estate Sector says Real Estate Astrologer Hirav Shah.