The real estate sector had several expectations from the Union Budget 2023 given that the past year had witnessed a significant recovery from the pandemic period and expectation was that long standing demands from a tax perspective would be addressed in the Budget so as to sustain the recovery in the sector.
On the policy front, outlay for PM Awas Yojana has been enhanced to INR 79,000 crores which demonstrates that the Government is cognizant of the need to increase investments for growth of affordable housing in the country.
Amendments introduced in the real estate sector seem to be with aligning the intent of the Government with the existing provisions. Although this should bring clarity to the tax authorities as well as taxpayers but the same has not met the expectations of the real estate sector. Especially, the change in taxation in Business Trust regime with respect to taxation of distributions by business trusts that do not suffer taxation either in the hands of business trusts or in the hands of unit holders, which could be negative for the growth of REITs in India.
