Posted by Affordable housing move forwards towards credit boost in the first full Budget of Prime Minister Narendra Modi’ second term, as the government continue with its efforts to achieve ‘Housing for All’ by 2022. In terms of taxes, the government has decided to increase the tax deduction benefit against interest on home loans for affordable housing, with a value of up to Rs 45 lakhs. “Interest deduction up to Rs 3.5 lakhs for affordable housing, as against Rs 2 lakhs earlier, is available for loans taken till March 31, 2020. This is expected to drive sales and demand of real estate sector and bring fence-sitters back into the market, within this financial year.
Several measures were announced for the revival of non-banking financial companies (NBFCs) from the ongoing debt crisis and liquidity crunch. In the maiden Budget speech Union finance minister announced that individuals are allowed an additional deduction of up to Rs 1.5 lakh for interest paid on home loans. Also this is to be noted that this deduction will be applicable to loans availed up to March 31, 2020 for the purpose of buying a house valued up to Rs 45 lakh. Or it can also be considered as an individual will get an enhanced interest deduction up to Rs 3.5 lakh, up from Rs 2 lakh earlier. This will translate to an overall benefit of around Rs 7 lakh over a period of 15 years.
The government should reduce the corporate tax from all the sectors which have been expected to boost the development on real estate. Heeding to this demand, the government has allowed companies having a turnover up to Rs 400 crores, to pay a lower tax of 25%. The government has said that it is committed to boosting infrastructure across the country. In the Union Budget 2019-20, the FM spoke about improving road; suburban railways and Metro connectivity; creating an expansive water management system; investing Rs 100 lakh crores in infrastructure over the next 5 years The finance minister also emphasised on transit-oriented developments (TODs) across the country and proposed a ‘One Nation One Grid’ initiative.
From the first budget of Modi Government 2.0 there is a expectation from the Budget2019 for Real Estate
1. Solution to funding issue that the real estate sector has been facing which was aggravated by the distress in the NBFC
2. Support for affordable housing that should help in increasing developers’ access to funds, for the development of affordable housing projects
3. The real estate sector is also expecting further relaxation in the GST rates to boost affordable housing plan for Aam Adami
4. Cross purchasing of residential and commercial properties, from sales proceeds which had a restriction on tax benefit
5. Infrastructure Development to boost the real estate sector, that should be extended to integrated township projects.
