SWAMIH Fund 2.0, higher TDS on rentals to boost real estate growth: Hiranandani

In a conversation with ANI, the NAREDCO chairman on Saturday stated that the Union budget presented by Finance Minister Nirmala Sitharaman in Parliament today, has been hailed as a transformative step for India's real estate and infrastructure sectors.

"Moreover, the introduction of SWAMIH Fund 2.0 seeks to alleviate the burden on constrained homebuyers by delivering stalled projects, while the hike in TDS on rentals up to Rs 6 lakh promises to bolster rental investments," he said.

A key highlight of the budget is the introduction of SWAMIH Fund 2.0, with a Rs 15,000 crore contribution from the central government. Additional contributions from banks and financial institutions are expected to strengthen the fund further.

The first phase of the SWAMIH Fund had successfully revived several stalled housing projects, benefiting homebuyers. The second phase aims to continue this momentum, ensuring that more delayed projects are completed, thus boosting the real estate sector.

Hiranandani added, "SWAMIH Fund One was very successful, and a large number of projects were started or had been cleared by that scheme. Now, the introduction of SWAMIH Fund 2, with a Rs 15,000 crore contribution by the central government, will be further strengthened by contributions from banks and financial institutions."

The government has also proposed a hike in the Tax Deducted at Source (TDS) on rental income, with the threshold now set at Rs 6 lakh per year (Rs 50,000 per month). This move is expected to encourage rental investments and increase tax compliance. Previously, the TDS threshold for rental income was Rs 2.4 lakh per year.

The change is likely to have a significant impact on landlords and tenants, ensuring better regulation and transparency in the rental market.

Another notable announcement is incentives for purchasing a second flat, which will encourage real estate investments. By making it easier for individuals to invest in multiple properties, the government aims to stimulate housing demand and drive the growth of the sector.

Hiranandani said, "If you're living in Mumbai or Delhi and you get a job in another city, you can then invest in a property there if you're staying for a longer period of time, and you also get the benefit of tax deduction."

Overall, the budget has set the stage for sustained growth in the real estate and infrastructure sectors, addressing key challenges while unlocking new investment opportunities. With strategic funding initiatives, tax reforms, and pro-investment policies, industry leaders remain optimistic about the future of these crucial sectors. (ANI)