Co-working industry expects multiple reforms from the upcoming interim Union Budget

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    The coworking industry, experiencing a surge in demand due to its cost-effectiveness and flexible work culture, is anticipating key reforms in the upcoming interim Union Budget. As large enterprises embrace hybrid work models, India stands out as the fastest-growing flex office market in the APAC region, projected to represent one-fifth of the office market by 2030. The industry has specific expectations related to GST and taxation that could further propel its growth.

    Lower GST Rate for Small-Scale Clients

    One of the anticipated measures is a lower GST rate for small-scale coworking clients. This move aims to attract small startups to the industry, fostering growth and contributing to increased government revenue.

    Enhancement of Section 80JJAA Benefits

    Expectations involve enhancing the salary upper limit for benefits under section 80JJAA from 25k to 40k and extending the timeline from 3 to 5 years. This supports startups and coworking entities in generating more employment.

    Addressing Input Tax Credit Concerns

    Input tax credit under GST is a crucial concern for the coworking sector. The budget is awaited to enable coworking firms to claim input credit on work contracts and construction services, reducing overall costs for companies leasing out coworking spaces.

    Stamp and Registration Duty Reforms

    Stamp and registration duties often pose financial challenges. The industry hopes for either a concession in stamp duty rates or permitting twice the duty paid as expenditure under income tax, encouraging even small agreements to get registered.

    Lower/Concessional TDS Rate for Improved Working Capital

    A vital requirement for the coworking industry is a lower/concessional rate of TDS to enhance working capital.

    Extension of Tax Holiday for Startups

    Extending the tax holiday for startups is suggested to further stimulate growth in the coworking sector, encouraging business scaling and increased investment.

    Infrastructure Development and Single-Window Clearance

    A push for infrastructure development and a single-window clearance system can expedite coworking space establishment in non-metro cities.

    Ease of Doing Business Improvements

    Overall, the coworking sector seeks continuous improvement in the ease of doing business, crucial for its sustained growth. Addressing regulatory concerns and incentivizing coworking firms through a mix of financial and non-financial measures is hoped for, contributing to accelerated economic growth.

    By Manas Mehrotra, Founder, 315Work Avenue.

    Also read: Dr. Niranjan Hiranandani’s statements about the Indian real-estate sector

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