More tax benefits on home loans, affordable housing and real estate changes to come

Finance Minister Nirmala Sitharaman will present the Union Budget for 2022-2023 on February 1, 2022. Even as the country reels under the unprecedented impact of Covid-19, the country’s residential real estate sector has shown resilience. marked resistance to its negative impact. Thus, the real estate sector is calling for tax breaks, a review of the definition of affordable housing, a reduction in long-term capital gains tax for real estate and new provisioning for rental accommodation, among others. .

The central government and state governments have put in place several reforms and incentives over the past year to revive the economy from the adverse effects of the pandemic.

Demand and supply sentiments in the housing segment in India have witnessed a revival due to low property interest rates, government measures such as stamp duty reduction and remission on construction premiums paid by builders.

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Sandeep Runwal, Chairman of NAREDCO Maharashtra, said, “Hopefully the government will continue its sincere efforts to promote affordable housing. The ceiling of Rs. 2 lakh per annum against the deduction of interest rates under Section 24(b) of the Act is to be raised to at least Rs. 5 lakh along with the removal of the ceiling of Rs 45 lakh affordable housing, which will significantly boost affordable and mid-segment housing. »

Also part of the amendment to section 80C of the Income Tax Act 1961 is to increase the limit for repayment of principal on home loans or introduce another deduction section relating to repayment of principal on home loans. of the main suggestions made by property developers.

Another thing that real estate agents expect is that the government will continue to promote affordable rental housing programs by announcing tax breaks for rental housing projects, which will accelerate the pace of investment in these programs. The government’s commitment to boosting affordable and rental housing will help it achieve its overall goal of housing for all.

Radha Dhir, Managing Director and Country Head, India, JLL, said, “The progress of the Special Window for Affordable and Middle Income Housing (SWAMIH) fund in meeting the target of completing stalled projects bears bear fruit, the allocation for the fund should be further increased. The government should launch similar funds for rental housing projects. »

For affordable housing, developers have further suggested increasing the house value limit to be raised to Rs 75 lakh in non-metropolitan cities and Rs 1.50 crore in metropolitan cities from the current cap of Rs 45 lakh.

To further attract small house buyers, it is believed that if the government can reduce stamp duty charges, it will effectively stimulate the property market. “Last year when Maharashtra and Karnataka reduced their stamp duty from 5% to 2%, it led to a positive result as there was an increase in house sales and at the same time,” said said Atul Monga, Co-Founder and Chief Executive Officer, BASIC Home Loan.

Stakeholders also want the Pradhan Mantri Awas Yojana-Credit Linked Subsidy Scheme (PMAY-CLSS) to be extended. The Credit Linked Subsidy Scheme (CLSS) and the time frame for availing its benefits under the Pradhan Mantri Awas Yojana for middle income groups may be extended until the budget allocation is not used, have suggested by industry experts.

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