Page 60 - Kolte Patil AR 2019-20

Government initiatives
GST reduction: The government announced a reduction of GST on
the housing properties - ~1% in the affordable housing segment and ~5% for other categories.
Additional deduction on interest:
The government announced an additional deduction of upto C1.5 Lakh on the interest paid on loans that were borrowed until 31 March, 2021.
RERA and its implications
The Real Estate Regulation Act (RERA) was passed by the Indian parliament in 2016, with the motive of increasing investments in the real estate sector and protecting interests
Few of the important compliances:
Alternative investment fund: The government set up an alternative investment fund of C25,000 Crore for projects that had been stalled.
Section 80IBA: The benefits were extended for an additional year for the affordable housing projects approved by 31 March, 2021.
Concession to real estate transactions: While taxing income from
of home buyers. For many years, the developers were at an advantage when it came to real estate transactions. With the implementation of RERA, the government wants to create a more
capital gains, business profits and other sources in respect of transactions in real estate, if the consideration value is less than circle rate by more than 5%, the difference is counted as income both in the hands of the purchaser and seller. The Government increased the limit of 5% to 10%.
(Source: Financial Express)
suitable environment for the seller and buyer. This was introduced with the primary motive of make a real estate transaction more transparent.
Informing allottees about minor additions and alterations.
Increasing focus on the timely completion of projects and delivery to the consumer.
Increasing
the quality of construction due to a defect liability period of five years.
Sharing all
the information about the project plan, layout, government approvals, land status and sub- contractors.
Consent of two-third allottees about any addition or alteration.
Restricting marketing before registration with RERA.
Consent of two- thirds allottees before transferring majority rights to third party.
Key highlights
Establishment of the regulatory authority: The Act established a regulatory authority in each state
and union territory and its functions included the protection of interest of the stakeholders, accumulating data at a designated repository and creating a robust grievance redressal system.
Compulsory registration: Every real estate project (total area of >500 sq.
metres or more than eight apartments in one phase) must be registered with its respective state’s RERA. While applying for registration, promoters are required to comply with the registration requirements (completion certificate or occupancy certificate) and are required to provide detailed information on
the project (land status, details of the
promoter, approvals and schedule of completion.
Reserve account: Primary reason for delay in the completion of projects was that funds collected from one project would get diverted to fund new projects. To prevent such a diversion, promoters are now required to allocate 70% of
all project receivables into a separate reserve account, and it can only be used
58 | Kolte-Patil Developers Limited