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Box 1.3: Real Estate Sector – Government Policies
• Introduction of Affordable Rental Housing Complex (ARHC) for migrant workers. The
Scheme is being implemented through two models: (i) Utilizing existing Government
funded vacant houses to convert into ARHCs through Public Private Partnership or by
Public Agencies. (ii) Construction, Operation and Maintenance of ARHCs by Public/ Pri-
vate Entities on their own vacant land.
• More than 2 crore housing units have been constructed in rural India.
• Procedure for construction permissions have been taken online in more than 2000 towns.
• An additional outlay of ` 18,000 crore for the urban housing scheme (PMAY-U). The al-
located amount is over and above the Budget Estimates for 2020-21 (` 8,000 crore) for the
PMAY-U and will be through additional allocation and extrabudgetary resources.
• Increasing the differential between agreement value and circle rate from 10% to 20% (un-
der section 43CA), Income Tax Act till June 30th, 2021. However, it is only applicable for
the primary sale of residential units of value up to Rs 2 crore.
• COVID-19 related disruption was to be treated as force majeure under Real Estate (Regu-
lation and Development) Act provision and registration and project completion timelines
has been extended by 6 months /9 months, depending on which part of the country the
project is being constructed and if these were falling after March 25, 2020.
STATE POLICIES
• Maharashtra government announced a reduction in the stamp duty on property purchas-
es. The reduction came into effect August 2020 onwards and the State brought down the
stamp duty on property registrations from 5 per cent to 2 per cent till December 31st, 2020.
After this period, buyers will pay 3 per cent as the stamp duty on property registrations
starting from January 1, 2021, to March 31, 2021. This reduction is available to buyers only
for a limited period only.
• Madhya Pradesh followed suit with a reduction of the cess on stamp duty charged for
registration of property to 1 per cent from 3 per cent in urban areas.
• The Karnataka state assembly passed a bill that supports government measure to reduce
stamp duty from 5 per cent to 3 per cent for flats priced between ` 21 lakh to ` 35 lakhs and
from 5 per cent to 2 per cent for flats costing up to `20 lakh.
BUDGET ANNOUNCEMENTS
• Extension of tax limit for availing tax holiday for affordable housing and introduction of
Annual Report 2020-21 | 195
• Introduction of Affordable Rental Housing Complex (ARHC) for migrant workers. The
Scheme is being implemented through two models: (i) Utilizing existing Government
funded vacant houses to convert into ARHCs through Public Private Partnership or by
Public Agencies. (ii) Construction, Operation and Maintenance of ARHCs by Public/ Pri-
vate Entities on their own vacant land.
• More than 2 crore housing units have been constructed in rural India.
• Procedure for construction permissions have been taken online in more than 2000 towns.
• An additional outlay of ` 18,000 crore for the urban housing scheme (PMAY-U). The al-
located amount is over and above the Budget Estimates for 2020-21 (` 8,000 crore) for the
PMAY-U and will be through additional allocation and extrabudgetary resources.
• Increasing the differential between agreement value and circle rate from 10% to 20% (un-
der section 43CA), Income Tax Act till June 30th, 2021. However, it is only applicable for
the primary sale of residential units of value up to Rs 2 crore.
• COVID-19 related disruption was to be treated as force majeure under Real Estate (Regu-
lation and Development) Act provision and registration and project completion timelines
has been extended by 6 months /9 months, depending on which part of the country the
project is being constructed and if these were falling after March 25, 2020.
STATE POLICIES
• Maharashtra government announced a reduction in the stamp duty on property purchas-
es. The reduction came into effect August 2020 onwards and the State brought down the
stamp duty on property registrations from 5 per cent to 2 per cent till December 31st, 2020.
After this period, buyers will pay 3 per cent as the stamp duty on property registrations
starting from January 1, 2021, to March 31, 2021. This reduction is available to buyers only
for a limited period only.
• Madhya Pradesh followed suit with a reduction of the cess on stamp duty charged for
registration of property to 1 per cent from 3 per cent in urban areas.
• The Karnataka state assembly passed a bill that supports government measure to reduce
stamp duty from 5 per cent to 3 per cent for flats priced between ` 21 lakh to ` 35 lakhs and
from 5 per cent to 2 per cent for flats costing up to `20 lakh.
BUDGET ANNOUNCEMENTS
• Extension of tax limit for availing tax holiday for affordable housing and introduction of
Annual Report 2020-21 | 195
