Karnataka Real Estate Regulatory Authority Extends Deadline for Annual Audit Reports

The Karnataka Real Estate Regulatory Authority (K-RERA) has recently announced an extension of the deadline for the submission of annual audit reports by real estate promoters. This move comes in compliance with the Real Estate (Regulation and Development) Act, 2016, and the Real Estate (Regulation and Development) Rules, 2017. The new guidelines aim to enhance transparency and accountability within the real estate sector by ensuring proper financial reporting. This article delves into the details of the extension and its implications for real estate promoters in Karnataka.

Background and Legal Framework

The Real Estate (Regulation and Development) Act, 2016, was introduced by the Government of India to regulate the real estate sector and protect the interests of homebuyers. The Act mandates the establishment of real estate regulatory authorities in each state, such as the Karnataka Real Estate Regulatory Authority (K-RERA) in Karnataka. The authority is responsible for ensuring transparency, fair practices, and timely delivery of projects.

Importance of Annual Audit Reports

Under the provisions of the Real Estate Act, promoters are required to get their accounts audited within six months after the end of each financial year. This audit is conducted by a chartered accountant in practice, who certifies and signs the statement of accounts. The purpose of the audit is to verify that the funds collected for a particular project have been utilized appropriately and in compliance with the percentage of project completion. These submissions, due on or before 15th December 2022, contribute to ensuring adherence to the regulations and maintaining financial transparency within the real estate sector.

Extension of Deadline

In accordance with the power conferred under sections 25 and 37 of the Real Estate (Regulation and Development) Act, 2016, the K-RERA has extended the deadline for submitting the annual audit reports. Real estate promoters now have more time to obtain and submit the revised Form 7, which is the Annual Audit Report on Statement of Accounts. The extended deadline allows promoters to fulfill their compliance obligations effectively.

Obtaining the Revised Form 7

Promoters are required to obtain the revised Form 7 for the financial year 2021-22 and subsequent years from a chartered accountant in practice. The new Form 7, along with the necessary information, details, and documents, must be submitted through a separate online module on the K-RERA web portal. This streamlined process ensures transparency and ease of compliance for the promoters.

Submission Requirements

In addition to the new Form 7, promoters are also required to submit the information of their annual audited books of accounts. This includes the Profit and Loss Account, Balance Sheet along with schedules, cash flow statement, Income Tax Returns, and Auditor report. These submissions, due on or before 15th December 2022, contribute to ensuring adherence to the regulations and maintaining financial transparency within the real estate sector.

Conclusion:

The extension of the deadline for annual audit reports by the Karnataka Real Estate Regulatory Authority provides real estate promoters with additional time to comply with the requirements set forth by the Real Estate (Regulation and Development) Act, 2016. By enforcing stricter financial reporting standards, the authority aims to promote transparency, protect homebuyers' interests, and ensure the proper utilization of funds in real estate projects. Real estate promoters in Karnataka must adhere to the revised guidelines, obtain the new Form 7, and submit the necessary documentation to demonstrate compliance with the regulations.

Note: The information provided in this article about Karnataka Real Estate Regulatory Authority (KRERA) is for informational purposes only. It is not intended as legal or professional advice and readers should consult qualified professionals for advice specific to their circumstances. The information provided in this article is based circular from the Karnataka Real Estate Regulatory Authority

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