Union Budget 2021: Here's what real estate sector expects from govt in today's Budget
New Delhi | Jagran Business Desk: Finance Minister Nirmala Sitharaman will be presenting the Union Budget 2021 at 11 am today. It is the first budget after COVID-19 pandemic pushed India's economic growth to a record low and every sector is in dire need of some reforms and reliefs to battle the losses caused due to the pandemic and subsequent lockdowns to curb its outspread.
Every sector has its demands and expectation from the Union Budget 2021. Among them is the real estate sector which is also reeling under the cascading effect of the coronavirus pandemic. The real estate took a huge blow as the production was stopped due to the lockdown and the demand of the product also declined with the decrease in the purchasing power of the buyer.
As the housing market revives from the lows hit last year, developers expect more measures in the upcoming budget to boost demand in the real estate sector. A major demand of the developers has been to remove the ban on subvention scheme for home loans. Realtors have noted that the ban is not in favour of home buyers as a large proportion of them do not have the capacity to pay both EMIs on their home loans as well as house rents.
Here are the major expectations of the Real Estate sector from Union Budget 2021:
- Apart from the subvention scheme being the main demand, industry bodies have also demanded a further widening of the definition of affordable housing. According to Confederation of Real Estate Developers' Associations of India (CREDAI), a unit with carpet area as defined under RERA may be redefined as 'that does not exceed 90 square metres in the metros and 120 square metres elsewhere'. Currently, residential units in metro cities with 60 square metres of carpet area and in non-metro cities residential units with 90 square metres of carpet area are considered as affordable housing.
- Tax reforms sought by the developers include the demand for allowing interest on housing loans to be considered under Income Tax Deduction without any ceiling. The current limit of interest deduction under Section 24 of IT Act 1961 on housing loan of Rs 2 lakh should be removed to incentivise home buyers and spurring overall demand, NAREDCO has recommended.
- According to the National Real Estate Development Council (NAREDCO), the government should also consider allowing interest on housing loans under Income Tax Deduction without any ceiling. They have demanded that the interest deduction under Section 24 of IT Act 2961, on housing loan of Rs 2 lakh should be removed to incentivise home buyers and increase the demand.
- The realtors also recommend that Long term Capital Gains from the sale of housing property should be taxed at 10 per cent as the provision similar to section 112 for equity shares. Also, a period of holding of house property should be reduced to 12 months from existing 24/36 months to qualify the same as Long term Capital asset. Apart from these, builders queue up cash discounts, waiver of club membership charges, discounts and freebies during festive seasons to perk up sales.
Posted By: Talibuddin Khan