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Budget 2012 Impact on Real Estate & Infrastructure

Budget 2012 Impact on Real Estate & Infrastructure. 1 August 2009. eXpectations. Real Estate. Industry Status Exclusion from Service tax Upward revision on deduction on interest on housing loan of self occupied houses Separate deduction on housing loan for individual home buyers

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Budget 2012 Impact on Real Estate & Infrastructure

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  1. Budget 2012Impact on Real Estate & Infrastructure 1 August 2009

  2. eXpectations

  3. Real Estate • Industry Status • Exclusion from Service tax • Upward revision on deduction on interest on housing loan of self occupied houses • Separate deduction on housing loan for individual home buyers • Clarity on rental income by developers

  4. Infrastructure • More avenues for raising funds for infrastructure projects • Exclusion from the provisions of MAT

  5. Budget impACT

  6. Policy Measures • ECBs to be permitted in low cost affordable housing projects • Mortgage guarantee trust fund • Scheme of 1% interest subvention to be extended to the new year for loans upto 15 lacs for houses valued upto 25 lacs • Rural Housing fund increased from Rs. 30 billion to Rs. 40 billion

  7. Cont… • Infrastructure debt fund of initial size of 8000 crs launched • 60,000 crs to be raised through tax free bonds in FY 2012-13 for infra projects • Target of covering 8800 kms of roads in NHDP • ECB for capital expenditure on maintenance and operation of toll systems • Central assistance of 18500 cr for DMIC spread over 5 years

  8. Direct Tax Proposals • Lowering of withholding tax on interest on ECBs from 20% to 5% for next 3 years on affordable housing projects • Benefit of investment linked deduction on capital expenditure on affordable projects under a central / state scheme notified by CBDT. • Tax to be withheld @ 1% on transfer of immovable property

  9. Cont.. • Relief from long term Capital gains tax if proceeds re-invested in • Start up capital of new manufacturing venture in SME sector • Funds utilised for purchase of plant and machinery • Exemption of Income of SEBI registered VCF / VCC extended to real estate sector • Beneficial rate of 5% on for 3 years starting 1st July 2012 to Non residents / Foreign companies extending foreign currency loans to certain infra projects like dams, ports, roads, shipyards, power projects

  10. Indirect Tax proposals • General Service tax increased from 10.3% to 12.36% • ST under works contracts composition scheme increased from 4.12% to 4.944% • Shift from positive list to negative list proposed under ST law • Exemption from ST to low cost housing ( <60 sq mts) • Value of services under works contracts

  11. Cont.. • Total value of good minus the value of goods transferred • Time limit for issuance of taxable invoice increased form 14 days to 30 days • Peak excise duty increased from 10% to 12% effective 17th March 2012. • Effective peak customs duty on import increased from 26.85% to 28.8 5% effective17th March 2012

  12. Thank You

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