Union Budget 2021-22: Announcements made by Nirmala Sitharaman to give a boost to affordable housing
New Delhi | Jagran Business Desk: Finance Minister Nirmala Sitharaman presented her third Union Budget 2021 on Monday amid the COVID-19 pandemic. She announced that the tax holiday for affordable housing projects will be extended for one more year till 31 March 2022. Last year this was extended by a year to March 2021 from March 2020.
While presenting Sitharaman further proposed to make dividend payments to REIT (Real Estate Investment Trusts) and Invit's (Infrastructure Investment Trusts) exempt from TDS.
In order to boost the supply of affordable houses, 'tax holiday' was provided on the profits earned by developers of affordable housing projects approved by 31 March 2020.
Earlier, Sitharaman had announced an additional deduction of Rs 1.5 lakh for interest paid loans taken to purchase affordable houses. The deduction available over and above Rs 2 lakh on the interest paid housing loans subject to certain conditions. Hence the total deduction available to an individual taxpayer is 3.5 lakh on the interest payment of housing loan for buying an affordable house. Under section 80EEA of the Income-tax Act 1961, this deduction is available.
Over the past few years, the Central government has been trying to boost the real estate sector and housing. However, in the year 2020, this sector suffered a big blow which also impacted the Indian economy. To boost the real estate sector, the developers expected to revise the land rates, easy finances, lower interest rate, cut in raw material rates and to digitalise regularisation.
Last year, Central government introduced GST and some major changes in the RERA Act, however, this didn't go down well with the stakeholders of the real estate. These changes were introduced to improve transparency and build confidence among the homebuyers.
Also, owing to the COVID-19 pandemic, recently, several states decided to slash stamp duty on sale deed documents by 3 per cent from 1 September-31 December 2020 and by 2 per cent from 1 January-31 March 2021.
Posted By: Niharika Sanjeeiv