Overview & Government InitiativesWith a GDP contribution of 6.3% and an annual employment of 7.6 million in 2013, Indian Real Estate has made rapid and expeditious progress during the last decade and a half. The slew of economic reforms undertaken and increased participation of the private sector provided the necessary impetus, which in return, resulted in establishing it as an organised sector and making it an intrinsic part and of foremost importance to Asia third largest economy. The sector still faces many challenges like policy paralysis and infrastructural and regulatory bottleneck. However with the new and stable government, the Sector is believed to make positive headways. The new Government, in his first Budget, has already shown both the intent and desire to infuse fresh life into this sector. The sector by large is enthused by the increased investment opportunity and tax holidays or exemptions. When it comes to Direct tax, the sector can be best analyzed with respect to some of the recent budgetary proposals such as, tax framework for Real Estate Infrastructure Trust (REITs) and Infrastructure Investment Trust (InvTrusts). Provision of withholding of TDS on purchase of real estate needs detailed deliberation. On the other hand, some of the major indirect tax implications on the sector also needs to be scrutinized with special reference to the Raheja Judgment which was upheld by the larger bench of Honble Apex Court in L&T Case, Service tax implications on pre-completion stage, works contract etc. From the Foreign Direct Investments (FDI) policy perspective, the impact on the sector can be best anatomized through a spate of measures/proposals announced in the Union Budget, 2014. These measures inter-alia include reduction in the minimum built-up area requirement for construction development projects eligible for FDI from 50,000 sq meters to 20,000 square meters and reduction in the minimum investment limit for FDI from the existing $10 million to $ 5 million in order to encourage the development of smart cities. Also specific low cost affordable housing projects would be exempted from minimum build-up areas and capitalization requirements.