SPACE FOR ALL
• Now, profits from carpet area equal to or less than 60 square meters will be exempt from tax
• Builders in Goa can now make an affordable 2BHK flat in 60 sq mtrs carpet area
• It will now be possible to make a 2BHK for around Rs 40 lakh in neighbouring areas of Panaji
------------------------------------------------
There is a real possibility that Goa will see more affordable housing projects in future as Union Finance Minister Arun Jaitley made some very crucial statements, while presenting the budget for 2017-18.
As per one of Jaitley’s announcements, builders developing affordable housing projects with flats of 60 square meter carpet area and less size will get tax exemption on profits from such projects under a scheme.
This scheme existed earlier too, but then this incentive was linked to 60 square meter super built-up area. Super built up area includes common areas like lift, stair-case, passages and garden, while carpet area is from wall to wall.
KulaSekhar, designated partner, Milroc, said, “It wasn’t possible for us to make a 2 bedroom-hall-kitchen (BHK) flat in 60 sq mtr super built up area because that left very little carpet area for a flat of this size. But, after the FM's announcement, it is really possible to make an affordable 2 BHK flat in 60 sq mtr carpet area.”
Builders say that on an average carpet area is 80% of super built up area. Since the benefit was earlier linked to 60 sq mtr super built up area, it translated to just 48 sq mtr carpet area, which is too little for a 2 BHK. And, middle-class families in the need of real-estate in Goa typically prefer a 2 BHK.
Datta Naik, managing director, Commonwealth Developer Pvt Ltd, said, “Besides, the finance minister has extended the completion period from three years to five years to avail this benefit.”
He elaborated, “Three years is often not enough to finish a project because you have to get everything from water to power connection and many other formalities. Now, we have five years to finish a project to get benefit of tax exemption under this scheme.”
Although Jaitley has given a boost, but it remains to be seen if affordable housing projects really pick up on ground in Goa. The state is known for really upmarket flats and villas with prices running to crores aimed mostly at rich people living outside Goa.
But, the real-estate market in the state is going through a slowdown and the upmarket segment made up of luxurious villas and flats is the worst hit, as people from outside are not investing much.
In such a situation, builders in Goa may choose to focus more on affordable housing projects, which are aimed at middle-class and lower middle-class people residing in the state, who are in genuine need of real-estate.
Naik said, “Whether or not a builder can do an affordable housing project depends upon when he actually bought land. But, if he has bought a piece of land few years ago at lower price, then with the current incentives, it is very possible for him to build an affordable 2 BHK of a very good quality in a place like Fatorda for Rs 36 lakhs.”
KulaSekhar added, “With the latest incentives, it is very possible to make a 2BHK flat for around Rs 40 lakhs in the outskirts of Porvorim, Panaji and Margao.”
------------------------------------------------------------------------------------------------------------
Premium cars, high-end
bikes and luxury goods
market to suffer in Goa
It will no longer be possible for people to buy a premium car, an ultra-modern bike, jewellery or any luxury good for that matter by making a cash payment of Rs 3 lakhs or more, as union finance minister Arun Jaitley put a ban on it, while announcing his budget for 2017-18.
Jaitley inserted two new sections in the income tax act to bring this huge change in a country like India, where cash is king, when it comes to buying anything, right from an aspirin to an aircraft.
As per newly inserted section 269ST of the income tax act, no person can receive an amount of Rs 3 lakhs or more in total from a person in a day or in respect of a transaction or in a series of transactions relating to one event or occasion from a person other than by way of an account payee cheque or a demand draft or an electronic payment.
This clearly shows that the central government’s intention is to track financial transactions, where unaccounted money may be utilised. In Goa and elsewhere too in India, often people use cash on which they haven’t paid tax to buy cars, bikes, jewellery or any luxury good they fancy.
Jaitely’s announcement will make this a lot more difficult. The finance minister also inserted a section 271DA which says that any person who has taken money in contravention of section 269ST will pay a sum as penalty equal to the amount he has received.
This clearly means that the onus to pay penalty will be on the recipient. A chartered accountant from Panaji said, “Now, it will be extremely difficult for people to use cash to buy premium products like high end cars, bikes and jewellery. These are right steps to curb black money.”
An automobile dealer said, “The market of premium cars and bikes will get affected in the short run. People typically pay 20% price of cars in cash. Due to this, the segment of cars with price more than Rs 10 lakhs will get affected.”
He continued, “However, in the long run, the biggest challenge is to make India a cash-less economy, which till now has so heavily dependent on cash.”
