Page 60 - Kolte Patil AR 2019-20

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:

Increasing
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-
contractors.

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

58 | Kolte-Patil Developers Limited