The Indian real estate sector has been witnessing
various policy changes in the last year. Modi
Builders Group, a Hyderabad-based realty firm, believes that these
regulations will reconstruct the market for the investors.
The Indian government is on a journey to bring a
positive change in the sector. Real Estate Regulatory Act (RERA) – to guarantee
timely deliveries, Goods and Services Tax (GST) – a unified tax regime and Demonetization
– a step against the black money, are government’s regulations to promote
transparency and professionalism in the Indian real estate sector.
The reforms have also benefitted the rental markets,
along with the residential sector. Considered the most crucial unit of the
Indian real estate, rental market can potentially grow in the upcoming years.
Reasons for slow growth of rental housing
Modi Builders Group have been effective
in every venture and are the leading constructors of Hyderabad. The firm is currently
offering comfortable apartments for sale
from the firm believe that the rental market of Indian real estate has not
taken off, in spite its potential. They stated, “The developers don’t find it
profitable to build projects solely for rental purpose. Moreover, the rental
returns they can expect are less than the cost of construction. This is the
primary reason for the slow growth of rental housing.”
However, new regimes by the Indian government are
expected to revive the rental market in India. The Hyderabad-based realtors
examine these reforms of the year 2017.
Section 194-IB to withhold taxes
The new section added to the Income Tax Act,
Section 194-IB, makes it mandatory for tenants who pay more than Rs 50,000 to
withhold the taxes at 5% on rent. The new amendment also demand individuals to
deposit the amount within prescribed time.
This new regime will bring landlords
receiving higher income in spotlight. To claim the benefits of Tax Deducted at
Source (TDS), they are accountable to report their full rental income in the
The finance analyst from Modi Builders said, “Both tenants and
landlords want their transactions clean. In fact, the tenants are now more
careful about the rental agreements and rental receipts. I think that, with new
regimes, the misconducts will considerably get reduced.”
Eradication of fake rent receipts
Section 10(13A) of the Income Tax Act says
that employees can be exempted from the taxes under House Rent Allowance (HRA).
Earlier, to avail this benefit, employees simply needed to submit rent receipts
along with the landlord’s PAN details if the rent amount exceeded Rs 1 lakh per
However, the government has recently
introduced a tribunal, wherein the officer evaluating can demand a proof for
authenticity. The leading constructors said that this new governing will
effectively deal with the practice of submitting fake rent receipts by the
Modi Builders consider the rental reforms beneficial for both the buyers
and property owners. They will enhance the developer’s confidence, resulting in
the allocation of available units. Besides, with increasing transparency, the tenants
will have trust while making decisions.