“Real estate has undergone tremendous changes with RERA and GST in the fold”, said an Arun Dev Builders spokesperson, when asked about the evolution of Indian real estate. These changes have occurred in the last one year, mainly due to the Centre’s crusade against black money hoarders.
“Consumers have never been this happy with the protective measures installed for their interests,” stated the Arun Dev Builders spokesperson. This also changes business, since everything has been made transparent. Small realty who use to cheat customers, have been ousted because of the strict regulations, thus reducing the competition and making it fair.
“It’s not just real estate buyers who have benefited from this transformation. Renters will enjoy the fruits of the realty makeover as well. The rental market has also undergone changes, which safeguards renters against fraud and malpractice”, added the spokesperson. There have been three main changes in the rental industry.
Model Tenancy Act
The Lease and Rent Control Act has become archaic and obsolete. In its place, the Model Tenancy Act has been introduced. This Act aims to level the laws for both the landlords and the tenants. Rental agreements that go over 11 months have to be registered. Security deposits worth up to three months of the rent are restricted along with a restraint of the tenant’s right to rent after a lease of six months.
No more fake rent receipts
The House Rent Allowance (HRA) allows tax exemption under Section 10(13A) of the Income Tax Act. This benefit can be availed by submitting the rent receipt. In case the rent is above Rs 1 lakh, the landlord’s PAN details are needed.
A tax loophole has been plugged, as the government stopped employees from evading tax through fake rent receipts. Now, the assessing officer can ask for leave and license agreement. There will be communication between the government and your housing society.
The Income Tax Act will now have renters withhold 5% of the tax on rental payments. Landlords often included this tax in their rent and would later fail in paying that amount to the government. Now, it’s the renter’s responsibility to pay that 5%.
According to the Arun Dev Builders spokesperson, there’s still a lot of work to be done in the rental market. Thankfully, the Centre has heeded the demand to better this sub-industry of real estate. The Central government may soon launch a ‘rent to own’ scheme. Through this initiative, people will be able to rent homes from government institutions. Some rented homes will be open for sale through easy installments.