After facing opposition from real estate developers and others engaged in realty sector, the government has decided to not implement one percent TDS on real estate transactions as was announced in recent Budget proposals.
Mr. Ravi Saund, COO, CHD Developers has welcomed the move of the government. This will help the real estate sector facing tough times. He added, "We are glad that the government rolled back the 1% TDS proposal on immovable properties. The roll back of the TDS will make the buyer easily accessible for a property transaction. Earlier the entire procedure of the TDS was complicated as the buyer had to provide personal details along with the property details and mentioning of the seller in the tax deduction form."
Ravi Ahuja of Cushman & Wakefield has welcomed the decision of government. He added that it is good that government has abolished the proposal which would have added to woes of real estate developers and investors, who are already facing tough times due to slower growth in real estate in select sectors. Real estate firms had requested Finance Minister to scrap the new proposal.
The government should come up with other innovative ways to curb black money in real estate transactions. Major reason for higher circulation of black money in real estate is lower collector rates in almost all locations compared to real market price. The collector rates are revised quite often, but they are still much lower compared to actual price at which deals are signed.
In addition, government should reduce stamp duty and other expenses on property transactions. This will lead to real valuation of property coming in papers and lower cost burden for buyers. The recent announcement will improve sentiment in the real estate market.