CREATING A FUTURE WITH CONNECTED COMMUNITIES

| BACKGROUND

 Urban Development & Infrastructure as Key Priority Areas hence noteworthy bearing on Real Estate Sector :

- Housing  - Industrial/Manufacturing - Tourism - Hospitality - REIT

| URBAN DEVELOPMENT INITIATIVES -        PMAY 2.0

- Addressing the need and shortage of Affordable Housing    - PMAY 2.0 Scheme to provide additional 3 Crore housing units in  urban & rural - Financial Allocation of INR 10 Lakh Crores - Cater to 1 crore urban poor and middle-class families -Central government to earmarked INR 2.2 Lakhs crore to be provided within 5 years - Interest Subsidies and Home Loans at Affordable Rates

| URBAN DEVELOPMENT INITIATIVES

- Facilitate development of cities as growth hubs via systematic development of peri urban areas - Development of effective policy and regulatory frameworks to foster brownfield redevelopment of     cities - Formulation of Transit Oriented Development [TOD] plans for 14 large cities with population above 30 lakhs along with an implementation and financing strategy - Plan to implement a policy framework for rental housing market  - As part of the urban development schemes, states will be encouraged to lower stamp duty and consider offering lower stamp duty rates for properties purchased by women to promote home ownership

| INDUSTRIAL DEVELOPMENT

To promote industrial development across India, the government has identified development of key nodes: The government is focused on creation of investment ready "plug and play" industrial parks in 100 cities in partnership with state and private sector. As part of the budget, the government will sanction 12 industrial parks under the National Industrial Corridor Development Program as well In a move to address the housing needs of industrial workers, the government has proposed to facilitate rental housing with dormitory accommodation in PPP mode with VGF (Viability Gap Funding) support and commitment from anchor industries

| INVESTMENTS IN INFRASTRUCTURE

Market-based financing framework will also be established to encourage private sector investments in infrastructure development Further, the launch of Phase IV of the PM Gram Sadak Yojana shall provide all weather connectivity to 25,000 rural habitations

| TOURISM INITIATIVES

In addition to measures outlined in the interim budget, in the wake of positioning India as a global tourist destination, the government has identified areas such as: - Rajgir and Nalanda in Bihar and Odisha  

| HOSPITALITY SECTOR - SPIRITUAL     TOURISM

The Kashi-Vishwanath Temple Corridor's redevelopment has led to 10 crore tourists visiting Varanasi since December 2021, boosting demand for hospitality and retail segment (10X). Similar impact is expected for the new pilgrim-centric corridor developments in Bihar This is also aligned with the governments long-term vision to position the country as the foremost travel destination globally by 2047, supported by schemes such as "Dekho Apna Desh" and Pilgrimage Rejuvenation and Spiritual Augmentation Drive (PRASAD) The revitalization of Nalanda University and Odisha's tourism infrastructure will enhance regional educational and cultural significance, driving demand for residential, retail and hospitality properties while stimulating infrastructure development and urbanization

| LAND DIGITALIZATION & REGISTRY

The budget suggests introduction of Unique Land Parcel Identification Number or Bhu-Aadhaar for rural lands as well as digitization of cadastral maps The subdivisions of these lands will also be updated based on current ownership and a land registry will be established. Land records in urban areas will be digitized using GIS mapping

| CAPITAL GAINS 

- Short term capital gains on which securities transaction tax (STT) paid on equity shares is proposed to be increased to 20 per cent from the present rate of 15 percent - Long term capital gains rate is proposed to be changed to 12.5 per cent for majority of assets (earlier rate was 10% to 20%). With rationalization of rate to 12.5 per cent, indexation benefit available under second proviso to section 48 is proposed to be removed for calculation of any long-term capital gains which is presently available for property, gold and other unlisted assets. Interest Cost & Stamp Duty also not to be included. Property values indexed upto 2001 are grandfathered for capital gains - FM's Clarification - Period of holding for being long-term asset for units of REITs/INVITs being reduced from 3 years to 1 year. This shall position REITs as an attractive investment medium by enhancing liquidity and investor participation - Sum paid by a domestic company on buy back of shares is proposed to be treated as dividend in the hands of shareholders and chargeable to tax at applicable rates. Further, no deduction for expenses shall be available against such dividend income. The cost of acquisition of the shares which have been bought back would separately generate a capital loss in the hands of the shareholder as these assets have been extinguished

| DIRECT & INDIRECT TAXES

-  No change in corporate tax rates for domestic companies - The corporate tax rate for non-resident entities has been reduced from the baseline rate of 40 per cent (effective tax rate of 43.68 per cent) to 35 per cent (38.22 per cent) and thus effectively reducing it by 5.46 per cent - This would have a positive impact on foreign entities having taxable presence in the form of branch offices, project offices or Permanent Establishments (PEs) of foreign companies in India, thereby stimulating the commercial real estate market in India - It is clarified that any income arising on letting out of a residential house shall not be chargeable as "Income from house property" instead of business income - It is clarified that threshold of INR 50 lakhs defined under section 194-IA for tax to be withheld @ 1% on transfer of immovable property, shall be applicable on the aggregate value of such immovable property instead of amount paid to each transferor/ by each transferee - Abolition of 'angel tax' on companies For a closely held company which receive any consideration for issue of shares, the aggregate consideration received for such shares exceeding such fair market value shall going forward, not be chargeable to income tax under the head "Income from other sources" -