Mumbai, August 2020: Drawing attention to the stagnation of the real estate sector in the country, Shri Manoj Kotak, MP from Mumbai North East, has written to the Finance Minister Nirmala Sitharaman, requesting assistance to unlock the true potential of this sector. In his letter to the country’s finance minister, he has highlighted the issue of an increasing number of residential real estate properties that are lying in a deadlock and how they can be used to fuel industrial growth.
Shri Manoj Kotak has proposed that if sale proceeds from these residential properties are made exempt from long-term capital gains tax, then they can be reinvested in industrial capital. Exempting residential property sale proceeds from long-term capital gains tax, applicable for reinvestment of proceeds in industrial capital, would require an amendment to u/s 54GB of the Income Tax Act.
Such a proposal would ensure that the country’s industrial and commercial sector gets a much-needed shot in the arm. It would also ensure a boost to our Hon’ble PM Narendra Modiji’s vision of ‘Atamanirbhar Bharat’ and ‘Make in India’. Increased investment in industrial capital would fuel manufacturing and allied activities to promote India as a manufacturing hub.
Speaking about his proposal, Shri Manoj Kotak said, “Such an amendment to the Income Tax Act will go a long way helping the stagnating real estate sector and new industries. Budding entrepreneurs will be the most benefitted from such a proposal because they often sell their residential properties to support business activities. A similar amendment spearheaded by PM Modi in 2016 had given a boost to the startup sector. Back then, u/s 54GB of the Income Tax Act was amended to include exemption on capital gains on the sale of a residential property applicable for reinvestment of proceeds into eligible startups. Today, at a time when the coronavirus pandemic has crippled many industries, I am proposing a very similar amendment so that two big sectors in India can benefit equally.”