As coworking spaces redefine India’s modern workplace, the sector has high expectations from the upcoming Union Budget 2025. The industry, driven by its affordability and flexibility, is looking for measures to fuel its rapid expansion and attract a wider array of businesses.

Manas Mehrotra, founder of 315Work Avenue, outlined key areas where the budget could support the coworking sector. “Ensuring the availability of institutional finance at competitive rates is vital for the growth of the coworking sector as it would enable firms to scale efficiently,” he noted. With hybrid work models becoming the norm, coworking spaces have become essential for businesses of all sizes, catering to startups and large enterprises.

Tax Reforms to Accelerate Growth

Lower GST rates for small-scale coworking clients are among the industry’s top demands. Such a move would not only make coworking more accessible for startups but also boost government revenue through increased participation in the formal economy. Mehrotra highlighted that changes to input tax credit under GST could also reduce costs for coworking firms and their clients, enhancing affordability across the board.

Additionally, the sector hopes for reduced stamp duty and registration charges, which currently burden agreements between landlords and clients. Offering concessions or treating these expenses as tax-deductible could encourage more registered agreements and improve transparency.

Enhancing Infrastructure and Incentives

The coworking industry also advocates for a push toward infrastructure development and implementing a single-window clearance system. These measures could streamline the establishment of coworking spaces, particularly in non-metro cities, expanding access to flexible work environments beyond urban hubs.

Mehrotra emphasised the need for a concessional rate of TDS to improve working capital for coworking businesses. “A further and continued extension of tax holidays for startups will also motivate them to scale their businesses and increase investment,” he said. Such incentives could help the coworking sector remain a key driver of India’s commercial real estate market, mainly as it evolves to meet the needs of a growing hybrid workforce.

A Defining Force in Real Estate

Coworking spaces have become a defining feature of India’s commercial real estate landscape, combining flexibility, collaboration, and sustainability. The sector’s scalability and growth potential continue to attract significant investment, with its share in the overall leasing market expected to grow further in 2025 and beyond.

By addressing these demands in the upcoming budget, the government could accelerate the coworking industry’s expansion, enabling it to play a pivotal role in reshaping India’s work culture and economic growth. As Mehrotra puts it, “The coworking sector expects continued improvement in the ease of doing business and a series of financial and non-financial incentives to ensure its sustained growth.”