2019 -20 Housing Sector Reforms PMAY Grameen: 1.5 crore houses have - - PowerPoint PPT Presentation

Union Budget 2019 -20

Housing Sector Reforms

• PMAY – Grameen: 1.5 crore houses have been built in last 5 years,

another 1.95 crore houses to be constructed by 2022

• Rental housing to be promoted, new tenancy laws will be proposed to

removed the archaic laws currently in use

• In addition to the existing interest deduction of Rs. 2 lakh, additional

deduction of up to 1.5 lacs for interest paid on loans borrowed up to 31st March, 2020 for purchase of an affordable house valued up to 45 lakh

• Alignment of the definition of affordable housing in the Income-tax Act

with the GST Acts.

• Limit of carpet area to increase from 30 square meters to 60

square meters in Metropolitan regions and from 60 square meters to 90 square meters in nonmetropolitan regions.

• Limit on cost of the house at Rs. 45 lakh in line with the definition

in the GST Acts

Union Budget 2019 -20

Infrastructure Sector Reforms

• Public-Private Partnership to unleash faster development and

completion of tracks, rolling stock manufacturing and delivery

• f passenger freight services
• To enhance the sources of capital for infrastructure financing:
• Credit Guarantee Enhancement Corporation will be set up

in 2019-20

• An action plan to deepen the market for long term bonds,

corporate bond repos, credit default swaps etc., with specific focus on infrastructure sector, will be put in place

• Permit investments made by FIIs/FPIs in debt securities

issued by IDF-NBFCs to be transferred/sold to any domestic investor within the specified lock-in period

• Tax incentives for International Financial Services Centre

(IFSC)

Union Budget 2019 -20

Capital Market Reforms

• Minimum public shareholding of listed companies is proposed to be

increased from 25% to 35%

• Enable stock exchanges to allow AA rated bonds as collaterals
• Review of user-friendliness of trading platforms for corporate bonds,

including issues arising out of capping of International Securities Identification Number (ISIN)

• Creating an electronic fund raising platform – a social stock exchange
• for listing social enterprises and voluntary organizations working for

the realization of a social welfare objective to raise capital as equity, debt or as units like a mutual fund

• Inter-operability of RBI depositories and SEBI depositories to bring

about seamless transfer of treasury bills and government securities between RBI and Depository ledgers

Union Budget 2019 -20

Foreign Investment Reforms

• Allow FIIs, FPIs investment in debt securities issued by NBFCs
• Existing Know Your Customer norms for Foreign Portfolio Investors

to be rationalized and simplified, to make it more investor-friendly

• Relaxation of KYC norms will better harness FPI investments
• Allow FPIs to subscribe to listed debt papers of REITs and InviTs
• Merge the NRI portfolio investment scheme route with FPI route
• Increase the statutory limit for FPI investment in a company from

24% to sectoral foreign investment limit with option given to the concerned corporates to limit it to a lower threshold

• FDI in aviation, media (animation, AVGC)and some other sectors
• 100% FDI in insurance intermediaries
• Local sourcing norms will be eased for FDI in Single Brand Retail

sector

Union Budget 2019 -20

Start Up India 2.0

• Introduce a television programme within the DD bouquet of channels

exclusively for start-ups.

• serve as a platform for promoting start-ups, discussing issues

affecting their growth, matchmaking with venture capitalists and for funding and tax planning.

• To resolve the issue of Angel Tax the startups and investors who file

requisite declarations will not be subjected to any kind of scrutiny in respect of valuation of share premium

• Valuation of shares issued to Category-II AIF shall be beyond the

scope of income tax scrutiny

• Extension of the period of exemption of capital gains arising from

sale of residential house for investment in start-ups up to 31.3.2021

Union Budget 2019 -20

NBFC Sector Reforms

• Interest on bad or doubtful debts in the case of NBFC-D and NBFC-

ND-SI shall be charged to tax on receipt basis (Section 43D)

• One time six months partial guarantee to PSBs for first loss up to 10%

to be provided in case of purchase of high rated pooled asset of sound NBFCs amounting to a total of 1 lakh crore during the financial year

• For NBFCs doing public placement of debt, maintenance of DRR done

away with

• NBFCs, other than NBFC-Factor to be allowed on TReDs platform
• Amendments to Factoring Act not yet proposed
• Regulation of HFCs to move to the Reserve Bank of India (RBI) from

NHB

• NHB, being the refinancer and lender, is also regulator of the

housing finance sector and hence it was a conflicting and difficult mandate to NHB

• Expert committee to study the current situation relating to long term

finance

Union Budget 2019 -20

Banking Sector Reforms

• To subside the cash dominated transactions, TDS of 2% will be

levied on cash withdrawal exceeding Rs. 1 crore in a year from a bank account.

• To promote digital payments, business establishments with annual

turnover more than Rs.50 crore to offer low cost digital modes of payment to their customers and no charges or Merchant Discount Rate to be imposed on customers as well as merchants.

• RBI and Banks are to absorb these costs

Union Budget 2019 -20

Distressed Companies Reforms

• The conditions of continuity of shareholding for carry forward

and set off of losses shall not apply to companies whose board of directors have been suspended by NCLT and new directors have been appointed

• For MAT computation liability, the aggregate of brought forward

losses and unabsorbed depreciation shall also be allowed as deduction.

• The Budget proposes to grant relaxations from the fair valuation

requirements with respect to shares transferred pursuant to resolution process

• Currently any transfer of shares attract the fair valuation

requirements under sections 56(2)(x) and the 50 CA of the Income Tax Act, 1961

Union Budget 2019 -20

Corporate Sector Reforms (1/4)

• Capital Market Reforms

 Minimum public shareholding (‘MPS’) of listed companies proposed to be increased from 25% - 35%.

• Over 1400 listed companies will have to offload promoter

shareholding if such proposal is made effective

• Impact of increased MPS on listed companies:

a) Better price discovery b) Increased public ownership c) Enhanced corporate governance standards d) MNCs might consider delisting

• Implementing issues may be faced while increasing MPS
• Compliances to be made under various regulations

a) Disclosure under SEBI Takeover Regulations, PIT Regulations, Listing Regulations, etc.

• Corporate actions to be taken up for increasing MPS

Union Budget 2019 -20

• SCRA Reforms
• Under section 23A - Penalty for failure to furnish information, return, etc.
• The penalty under this section can also be levied where the listed entity fails

to furnish information, return, etc to the SEBI. Earlier the penalty was levied if the listed entity failed to report to the stock exchange

Corporate Sector Reforms (2/4)

Corporate Sector Reforms (3/4)

• SEBI Act Reforms
• Under section 14
• The General Fund constituted under the said section can be utilized for

capital expenditure as per annual capital expenditure plan approved by the Board and the Central Government.

• New Insertion - Reserve Fund shall be constituted and 25% of the annual

surplus shall be transferred to such Reserve Fund.

• After application towards expenses, the surplus of the General Fund to be

transferred to Consolidated Fund of India.

Cont..

Corporate Sector Reforms (4/4)

• Under section 15C
• Penalty shall be levied under the section if the listed entity fails to redress

investors' grievances when called upon to do so either in writing or by means

• f electronic communication.
• Under Section 15F
• Penalty for non compliance by stock brokers extended to one crore rupees
• New Section 15HAA inserted
• Penalty for alteration, destruction, etc., of records and failure to protect the

electronic database of Board inserted.

• Penalty shall not be less than one lakh rupees but which may extend to ten

crore rupees or three times the amount of profits made out of such act, whichever is higher.