Year 2016 has been a year full of events, from major decisions like Demonetization to GST Bill to the departure of the RBI Governor Raghuram Rajan. A lot has happened in the year 2016 and each of it has left its mark on the Indian Economy. Now with the Union budget being just a few days away, every sector is waiting for the first working day of February 2017 when the Union Budget will be presented, unlike the colonial practice of holding it on the last working day of February.

Like other sectors, Real Estate also is placing its bets on the upcoming Budget to bring a fresh wave of recovery. There are demands of relaxation in income tax rate, provide clarity on GST, raise House Rent Allowance (HRA) deduction and announce policies to standardize construction materials in order to uplift the real estate industry.

To encourage the common man to invest in real estate measures have to be taken such as relief in income tax rate and in stamp duty. This definitely will be an incentive for first time home buyers and give an impetus to the Real Estate industry. A very important component of cash transactions in this industry is the high stamp duty. The upcoming Budget is expected to sharply bring down it to at least 4 percent or so.

While the goods and services tax (GST) tax structure has been announced, the real estate industry is also anxiously waiting to seek clarity on which tax rate is applied to it. As of now, home purchasers are required to pay service tax and value-added tax on top of stamp duty and registration charges. Introduction of GST in place of all of these taxes can bring down the impact of such indirect taxes.