Friday, 19 August 2016

Goregoan Mega Redevelopment gets HC approval

The Maharashtra Housing Area Development Authority (MHADA) has informed the Bombay High Court that it would approve redevelopment plans Motilal Nagar area in Goregaon. A division bench of Chief Justice Mohit Shahand and Justice MS Sanklecha has given their go ahead for the plans. The area is having large scale illegal constructions. The societies which do not go for redevelopment are facing demolition of their structures.

The order comes as a great relief for thousands of residents living in the area. The Motility area is spread across 128 acres and initially had around 400 tenements consisting of small row houses. The allotters had made vertical and horizontal extensions without permission and thus there are over 6000 illegal constructions today. A PIL had sought action against the unauthorized structures in the area and the HC had taken up the matter for hearing. The MHADA under the amended Regulation 33/5 will undertake redevelopment work. Lawyers have said the present occupants could get apartments of over 600 sq.ft. Nearly, 53 societies had submitted redevelopment plans of which none had been approved. Now, with the housing body which itself is going for redevelopment the plans submitted by other societies are also likely to get approval.

If the societies come up with redevelopment of the structures, the BMC had said the corporation would consider the plea of re-development. The HC in January this year had ordered MHADA that if any scheme for redevelopment were to be submitted it would get priority in the matter.

 REITs Income Tax provisions after election: FM

The market regulator SEBI attempt to revive the much awaited Real Estate Investment Trust (REITs) has hit another roadblock, the reason this time being the upcoming general elections to the Lok- Sabha in 2014.

Just three days were left for receiving comments on SEBI’s draft regulation on REITs. But, the Finance Ministry has ruled out introduction of any provisions in the Income Tax act,1961 to allow tax benefits to the investors, before Budget after elections to the Lok-Sabha next year. 

A Finance Ministry official has said that only after the formulation of a concrete policy on REITs the tax incentive to encourage investment can be dicussed. But, due to the upcoming election year to the Lok-Sabha any tax benefits for REITs have been postponed to new budget in July 2014. He has further said that discussion on the subject matter can start only after March 2014 and till then no amendments will be made in the income tax act to grant any tax incentive for REITs.

Implementation of the tax incentives would be important in the smooth implementation of REIT. The industry had demanded tax incentives like exemption of capital gains tax for transfer of assets made by the sponsor i.e., a developer or a private equity fund, to the REIT Special Purpose Vehicle (SPV) level and also one time waiver of stamp duty. 

The REIT stakeholders are also demanding that when REIT units are traded on the exchanges they should attract the same securities Transaction Tax and long term short term capital gain tax as applicable to equities. SEBI chairman Mr.U.K.Sinha has said that they would push for grant of incentives from the tax authorities to make REITs work. He has further said that the REITs will not work without the tax benefits.

REIT is a company or a group that owns and manages real estate properties on be half of the investors and similar to a share holding company. Both the investors and the real estate industry will be benefited through REITs. The draft guidelines for REIT’s was released by SEBI on Oct 10 and had invited comments to be submitted latest by Oct 31, 2013.

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