Everyone are talking about the levying of Service tax on commercial lease rentals. But are you aware in what other ways Budget'07 may have an impact on your real estate decisions? To know more read on:

The bulk of the office space has been taken up by the outsourcing companies who are setting up shops. As it is, the rental incomes have gone up substantially. On top of that, there is a 12% service tax and there is a 3% surcharge so it is 12.36% - give and take 15% rental cost, will go up which is going to hurt because these BPOs do work on small margins and that’s something which I am very concerned about.

Another concern is about the cement price increase. People that increase in cement prices by Rs.12 a bag will pass on to the Developers. But who pays for it? Ultimately the customer pays for it, so what is an anti-inflationary measure becomes an inflationary measure.

The only good news is for SEZs - he has not touched the SEZ sector. Some people were worried; in fact, IT companies will look at SEZ more because that’s the only place where there is no MAT for SEZs for IT companies.


Did I leave out anything else? Let me know..........
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