Impact of Work from Home and Rise of Coworking Spaces on the Bengal Real Estate Sector

The COVID-19 pandemic had forced the world to undergo an overnight change with respect to the way it conducted both its personal and professional lives. It brought about boom in some industries, such as e-commerce, ed-tech, etc. and stagnation in others such as travel, hospitality, etc. The real estate industry also underwent some drastic changes, which has affected various stakeholders.

Encouraging Government Interventions

In the recently convened National Conference of Labour Ministers of all States and Union Territories, the Prime Minister said that “flexible workplaces, a work-from-home ecosystem, and flexible work hours” are the needs of the future. Another development with a similar vision of flexible workplaces was the Special Economic Zones (Third Amendment) Rules, 2022 and the Special Economic Zones (Fifth Amendment) Rules, 2022.

On 14th July, 2022, notification no. G.S.R. 576(E) was published by the Ministry of Commerce and Industry, Government of India promulgating the Special Economic Zones (Third Amendment) Rules, 2022, which permitted work from home for Special Economic Zone (“SEZ”) employees and solidified the legal framework of work from home and remote working. By this notification, Rule 43A was added to the SEZ Rules, 2006 which enabled employees (including contractual employees) to work from home or from any other place outside the SEZ up to a maximum of fifty percent of the total employees of the SEZ Unit. It extends to employees of the IT and ITes SEZ units, employees who are temporarily incapacitated, employees who are travelling and also employees who are working offsite. In order to avail itself of this, the SEZ Unit had to submit its proposal for working from home to the Development Commissioner through email or physical application at least 15 days in advance.

However, on 8th December 2022, the Ministry published another notification bearing no. G.S.R. 868(E), bringing about the Special Economic Zones (Fifth Amendment) Rules, 2022, which granted further relaxations to the SEZ work from home norms. By virtue of this amendment, the percentage of employees who can work from home has been increased from 50% to 100% till 31st December 2023. It is also no longer mandatory to get prior approval of the proposal for work from home, and the SEZ unit owners are only required to intimate the same to the Development Commissioner.

Due to pandemic/lockdowns, most officegoers started working from home or remotely. Although remote working existed even before the pandemic, especially among freelancers, it was because of the pandemic that most businesses were forced to adapt to this mode of working even for full-time employees. Although the world is back to normal at present, both employers and employees are refusing to go back to the traditional office setup. The December 8, 2022 notification will now further encourage IT companies and their employees to opt for work from home in the SEZs.

 

Increase in Demand for Residential Spaces & Shifting of People to Tier 2 And Tier 3 Cities

Another interesting trend that has come out of this pandemic is the increase in demand for bigger residential spaces, including luxurious and semi-luxurious apartments. As per the reports of CREDAI, Bengal, the sales of 2 BHK apartments have gone down from 48% in 2019 to 40% in 2021, while on the other hand, sales of 3 BHK apartments have gone up significantly from 44% in 2019 to 54% in 2021. The sales of 4 BHK apartments have also more than doubled during the same period, going up from 2% in 2019 to 4.7% in 2021. This increase in demand for luxurious residences has taken place since individuals who work from home prefer an apartment with a home office, and therefore, they are leaning towards larger residential spaces.

 

The demand for residential real estate is highly dependent on where people go to work, as people prefer to live near their workplaces in order to minimise travel. Now that a large group of people are not required to physically to work regularly, they are shifting to tier 2, tier 3 cities and suburban areas from the metro areas as these places offer affordable housing options and a better standard of living at a lower cost. The tier 2 cities across India have witnessed healthy investment in residential real estate in recent years, with more residential project launches by developers.

 

Rise of Co-Working Spaces

As a result of the change in mindset of employers and employees, a new form of commercial real estate has gained popularity recently, namely, “co-working spaces.” A lot of companies, especially small businesses and start-ups have opted for this model across India instead of investing in individual spaces, as it offers both cost-effectiveness and flexibility. Some of the reputed coworking spaces, such as Colliers, Awfis, Coworks have already set up spaces in different cities across India. Due to this huge demand for coworking spaces, companies such as Awfis, Workport Coworking, East India Works Eden, My Cube and Seamus Management have already set up coworking spaces in Kolkata.

 

Future Trend

Now that offices are transitioning from work-from-home models to hybrid models and some workplaces are also calling their employees back to the office, the demand for office space and coworking space transactions has started to pick up again. Although the employees of the IT/ITeS sector in SEZs still have the liberty to work from home, most employers in other sectors have mandated that employees come back to the office. It will be interesting to see if the volume of rentals and leasing in office spaces goes back to the pre pandemic conditions or is affected by the rise of “co working spaces” and the new notification dated December 8, 2022 allowing 100% work from home in SEZs until December 31, 2023.

 

Now that offices are transitioning from work-from-home models to hybrid models and some workplaces are also calling their employees back to the office, the demand for office space and coworking space transactions has started to pick up again. Although the employees of the IT/ITeS sector in SEZs still have the liberty to work from home, most employers in other sectors have mandated that employees come back to the office. 

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Preserving Equality in Online Education

The silver bullet of technology has not only managed to pierce sectors like finance, law, healthcare, etc. but also the predominantly conservative sector of education. Pandemic was the catalyst for steering a range of investments and innovation in the online learning space. Not surprisingly, the industry is set to grow by $2.28 billion during 2022-2026, progressing at a CAGR of 19.50% during the forecast period.[1]

The rapid adoption and need of online education platforms have inspired pedagogical approaches to make tech-based education more engaging and interactive. It is anticipated that integration of blockchain, gamification, artificial intelligence, immersive technologies, learning analytics, etc. will make the online learning experience more adaptative and personalised to the needs of each individual student.

While the world of virtual education may have opened lucrative avenues, its impact dwells differently on students, teachers, schools, parents, and the industry as a whole. 

 

Supreme Court’s View on Online Education

During the pandemic, schools switched to the digital medium, and as such, the right to education was virtually denied to children belonging to the disadvantaged group (DG) or economically weaker section (EWS). The Supreme Court, headed by a three-judge bench of Justices D.Y. Chandrachud, Vikram Nath and B.V. Nagarathna in October 2021, stated that the digital divide, against the backdrop of the COVID pandemic, has produced “stark consequences.”

The top court was hearing a plea by the Action Committee on Unaided Recognised Private Schools in connection with the access to technology by children who are attending online classes and the funding needed for the same. It was a petition filed by the private school managements challenging the Delhi High Court order of September 2020 directing them to provide their 25% quota of EWS/DG students online facilities free of charge. The High Court had said that the schools could get themselves reimbursed from the government.

The Delhi government appealed to the Supreme Court against the High Court’s order, saying it had no resources to reimburse the school for the online gadgets. Though the Supreme Court had stayed the High Court order in February 2021, the bench led by Justice Chandrachud said both the Centre and states like Delhi could not bow out of their responsibilities towards young children.

The court observed that the disparity exposed by online classes had been heart-rending. The technology gap caused by online classes defeated the fundamental right of every poor child to study in mainstream schools. The court also ruled that the right to education for little children hinged on who could afford gadgets for online classes and who could not. Many students had to take temporary breaks, and in the worst case, drop out, due to a lack of resources to access the internet, for online education as their families could not afford them. Moreover, the risk of the children, who dropped out of school, being drawn into child labour or child trafficking was high. The needs of young children, who are the future of the country, cannot be ignored, it said. Though schools were gradually opening due to the receding curve of the pandemic, the need to provide adequate computer-based equipment and access to online facilities for children is of utmost importance.

The needs of young children who represent the future of the nation cannot simply be ignored. A solution must be devised at all levels of Government – State and Centre to ensure that adequate facilities are made available to children across social strata so that access to education is not denied to those who lack resources. Otherwise, the entire purpose of the Right to Education Act, allowing EWS students to learn alongside mainstream students even in unaided schools, will be defeated.

The court further held that Article 21A (the right to free and compulsory education for children aged between 6 and 14) must be a reality. It directed the Delhi government to develop a plan to help children in the EWS category and added that the Centre and State governments should jointly work to develop a realistic and lasting solution to ensure children are not denied education due to lack of resources. The said bench further said: “It is necessary for the Delhi government to come with a plan to uphold the salutary objective of the RTE Act. Centre to also coordinate with state governments and share concurrent responsibilities for the purposes of funding.”

It also appreciated the Delhi High Court’s order directing the Delhi government to provide computer-based equipment and an internet package free of cost to EWS children in private and government schools. The Bench asked the Delhi Government to come out with a plan to effectuate the ‘salutary object’ upheld in the High Court’s decision. The court said the Centre should join in the consultations. The issues raised in the present proceedings will not only cover unaided schools but also government and aided schools. The Bench issued notice in the private school’s management petition and ordered it to be tagged with the pending Delhi Government petition.

 

Guidelines for Digital Education

COVID 19 accelerated the adoption of technology and brought about a dynamic shift in the sector. However, it was also realised that technology may improve the quality of dissemination of education; but it can never replace the classroom teaching and learning experience. While adopting the blended and hybrid model of education, a balance needs to be struck in learning and taking advantage of technology, and helping children become socially and emotionally healthy individuals and responsible citizens.

Bearing that in mind, Pragyata Guidelines for Digital Education were released by the Ministry of Human Resource Development’s Department of School Education and Literacy. At the beginning of the academic year 2021-22, the school education department informed all the schools to follow these guidelines while conducting online classes. According to the guidelines, the maximum screen time per day for kindergarten/preschool students has been limited to 45 minutes. However, for classes 1 to 5, schools can conduct two sessions of 1.5 hours per day for not more than 5 days in a week. For classes 6 to 8, screen time has been limited to 2 hours and for classes 9 to 12, limited to a maximum of 3 hours per day.

 

The Two Sides of Online Learning

Online classes offer a comfortable learning environment for students and offer tremendous growth opportunities, but it does instil a sense of isolation. Students, especially those belonging to younger age groups, thrive in a socially simulated environment. However, given the set-up of online classes, children fail to develop the ability to identify social norms and etiquettes. Further, online classes also limit the time and attention teachers can extend to their students. As a consequence, students that require extra attention and guidance fail to perform well. Also, online education may be accessible, but it is not affordable. Virtual learning requires expensive gadgets like computers, laptops, tablets, or smartphones. Hence, students in the economically weaker sections are left behind.

On the plus side, exhaustion and added costs of commuting are avoided in online education. In addition, online learning platforms offers a variety of courses and programmes that empower students to explore opportunities outside the realm of their curriculum. Moreover, since it is not possible for teachers to constantly monitor the activities of all students, online classes instil a sense of responsibility and self-discipline in them as they are made to realise that their actions and negligence will have a long-term impact on their future.

Mapping and understanding the positives and negatives of online education will enable educational institutes and the ed-tech industry to pioneer strategies for more efficient delivery of education. At the same time, the legislature must take a pro-active stance in ensuring that the fundamental right to education is protected in all manner and forms without any compromise on the well-being of learners.

References:

[1] https://www.businesswire.com/news/home/20220429005261/en/2.28-Bn-Online-Education-Market-in-India-2022-2026-Popularity-of-Big-Data-and-Learning-Analytics-and-the-Inclusion-of-Gamification-to-Lead-to-Demand—ResearchAndMarkets.com

During the pandemic, schools switched to the digital medium, and as such, the right to education was virtually denied to children belonging to the disadvantaged group (DG) or economically weaker section (EWS). The Supreme Court, headed by a three-judge bench of Justices D.Y. Chandrachud, Vikram Nath and B.V. Nagarathna in October 2021, stated that the digital divide, against the backdrop of the COVID pandemic, has produced “stark consequences.”

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Being COVID Sanguine: Some Silver Linings to the Pandemic

Given the devastating effects the COVID 19 pandemic has had on the world in general and India in particular, you’re probably wondering about the title of this blog. Don’t get me wrong- I am in no way trying to diminish the massive damage to life, livelihoods and health that the pandemic has brought upon millions of people in India and around the world. Had I seen a similar title even 4 months ago, I too would probably have experienced thoughts similar to what you felt. 

So what has changed in a matter of a few weeks? There has been a major drop in the number of cases around the country; instances of serious infections requiring ICU care have also declined. The vaccination drive is going from strength to strength, with as many as 10 million people being vaccinated across India on a single day.

But the biggest change is in my own perspective. Earlier, I always saw only the negative and the bleak, but now I am beginning to see some positives. And that’s what prompted me to write this piece. Here are five specific areas in which I see positives.

Our people exhibited phenomenal resolve and resilience

The second wave (March-June 2021) was especially brutal on India. Our healthcare infrastructure was stretched beyond breaking point. Oxygen was in short supply, as were critical drugs. Medical experts were trying to firm up treatment protocols. Although vaccinations had begun for some people, the Cowin portal was glitchy and even vaccine supply chains were far from streamlined.

But we saw hundreds of self-help groups come up on platforms like Whatsapp and Telegram. Volunteers would man them 24×7 to ensure that across India, patients and their families got access to critical resources including food, oxygen cylinders and medicines. These supplemented (and often replaced) government measures. Technology was used to the fullest, to ensure that people knew where vaccine doses were available, so they could quickly register.

The pandemic has powered a surge of innovations

Almost every day, there were/are media reports around some innovative activity in India. Some emanate from the government sector: for example, in many cities, stadia and large school buildings were converted into makeshift hospitals or Covid Care Centres.

There are many examples of innovation emerging from private enterprise too. For example, given the large quantities of PPE waste being generated, someone came up with a way to convert used PPE kits (which would otherwise have to be incinerated or buried safely in landfills) into briquettes that can be used for constructing low-cost housing.

Around the country, different teams developed prototypes of low-cost oxygenators and ventilators. This will be a source of great benefit to the country because it reduces dependence on imports. And as we have seen, geopolitical triggers or maritime issues (like the ship getting stuck in the Suez Canal) can wreak havoc with global supplies.

Recently, I read about a woman-led team in Hyderabad inventing a fabric that has anti-virus and anti-bacterial properties. Imagine the wide range of applications at home, in workplaces and public spaces for such a versatile invention.

 

Public-Private Partnership (PPP) redefined

The notion of Public-Private Partnerships too has changed in the last 18 months or so. Whether this is a direct result of the pandemic or more the outcome of policy changes is perhaps hard to separate. But India as a nation is seeing much higher levels of collaboration between government laboratories and infrastructure and the private sector. DRDO collaborating with start-ups for developing drones that can be used for vaccine delivery is one example. Another is ISRO encouraging startups and even students to design satellites. A third is ICMR collaborating with Bharat Biotec in the development of Covaxin, India’s first indigenous Covid vaccine.

Passions are changing into professions, creating employment opportunities

On the one hand, the pandemic has killed many livelihoods. But with many people looking at new, home-based business ventures- and using digital channels to market themselves and deliver their products (and in some cases, services too), one can hope that they will be able to scale and over time, some job losses can be offset. Examples include food delivery, baking, making pickles etc.  Of course, India still needs contact-based industries, such as construction and manufacturing, to pick up and get back on track.

Attempts to harness the creative talent of our youth

This may not be directly linked to the pandemic, but I believe that greater participation will result because of the restrictions imposed by it. The government is looking for innovative ideas from our youth. The Bureau of Police Research and Development (BPR&D) and The All India Council for Technical Education (AICTE) recently announced Manthan 21, a “hackathon” aimed at getting our country’s youth to come up with innovative solutions to address the challenges faced by our intelligence and security agencies. Specific areas have been identified. (more details are available here: https://manthan.mic.gov.in/about-intellithon.php).

 

Experts say that the world around us has changed for ever, and there’s a “new normal” in the wake of the pandemic. There is no doubt about that. But hybrid working models or other changes visible in the organized sector (especially in larger firms and companies) are not the only changes to our world resulting from the pandemic. The impact of the less visible changes described above too will be felt by India and the world in the years ahead.

 

Photo by Aljoscha Laschgari on Unsplash

The second wave (March-June 2021) was especially brutal on India. But we saw hundreds of self-help groups come up on platforms like Whatsapp and Telegram. Volunteers would man them 24×7 to ensure that across India, patients and their families got access to critical resources including food, oxygen cylinders and medicines. 

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Tax Alert: Latest COVID-19 Related Relaxations and Exemptions Issued by the Government

In view of the prevailing COVID-19 pandemic situation in the country, resulting in hardship and difficulty vis-à-vis complying with various due dates under the Indian Income tax Act, 1961 (‘the Act’) and causing severe impact on the cash flows, the Central Board of Direct Taxes (‘CBDT’) has time and again issued relevant Notifications, Circulars and Press Releases extending the due date w.r.t  various direct tax compliances.

 

Updated as on 13th July 2021

 

In the table below, we have summarized the key Notifications and Circulars issued by the CBDT, which has extended the due dates of various direct tax compliances under the Act:

Sr No

Compliance Particulars

Original Due Date

Extended Due Date[1]

1

Objections to Dispute Resolution Panel (DRP) and Assessing officer under section 144C

01 June 2021

31 August 2021 (note 1)

2

Statement of Deduction of Tax for the last quarter of the Financial Year 2020-21

31 May 2021

15 July 2021

3

Certificate of Tax Deducted at Source in Form 16

15 June 2021

31 July 2021

4

Statement of income paid or credited in Form 64D by Investment Fund to its unit holders for Financial Year 2020-2021

15 June 2021

15 July 2021

5

Statement of income paid or credited in Form 64C by Investment Fund to its unit holders for Financial Year 2020-2021

30 June 2021

31 July 2021

6

The application under Section 10(23C), 12AB, 35(1)(i i)/(iia)/(iii) and 80G of the Act in Form No. 10Af Form No.10AB. for registration/ provisional registration/ intimation/ approval/ provisional approval of Trusts/ Institutions/ Research Associations

30 June 2021

31 August 2021

7

Compliances for claiming exemption under provisions contained in sections 54 to 54GB

01 April 2021 to 29 September 2021

01 April 2021 to 30 September 2021

8

Quarterly Statement in Form 15CC to be furnished by Authorized Dealer in respect of foreign remittances made for quarter ended 30th June 2021

15 July 2021

31 July 2021

9

Equalization Levy Statement in Form 1 for Financial Year 2020-21

30 June 2021

31 July 2021

10

Time Limit for processing Equalization Levy return

–

30 September 2021

11

Annual Statement in Form 3CEK to be furnished under section 9A(5) by Eligible Investment Fund

29 June 2021

31 July 2021

12

Uploading declaration received from recipients in Form No 15G / 15H for quarter ended 30th June 2021

15 July 2021

31 August 2021

13

Exercising of option under section 245M(1) in Form No. 34BB for withdrawing application before Settlement Commission

27 June 2021

31 July 2021

14

Last date of linking of Aadhar with PAN under section 139AA

31 March 2021

30 September 2021

15

Last date of payment under Vivad se Vishwas (without additional amount)

–

31 August 2021

16

Last date of payment under Vivad se Vishwas (with additional amount)

–

31 October 2021

17

Time Limit for passing assessment / reassessment order

31 March 2021

30 September 2021

18

Time Limit for passing penalty order

–

30 September 2021

19

Due date for furnishing Return of Income – Non Audit Case

31 July 2021

30 September 2021

20

Due date for furnishing Tax Audit Report

30 September 2021

31 October 2021

21

Due date for furnishing Transfer Pricing Audit

31 October 2021

30 November 2021

22

Due date for furnishing Return of Income – Audit case

31 October 2021

30 November 2021

23

Due date for furnishing Return of Income where Transfer Pricing is applicable

30 November 2021

31 December 2021

24

Belated / Revised return for Assessment Year 2021-22

31 December 2021

31 January 2022

Note:

1) If the last date allowed u/s. 144C is later than 31 August 2021 then such a later date shall prevail.

 

References:

[1] Notification No 74/2021 & 75/2021 and Circular No 9/2021 dated 20 May 2021 and 12/2021 dated 25 June 2021

Image Credits: Photo by Nataliya Vaitkevich from Pexels

We have summarized the key notifications and circulars issued by the CBDT, extending the due dates of various direct tax compliances under the Act.

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