Finance minister Nirmala Sitharaman will present the Union Budget for 2022-2023 on February 1, 2022. Even as the country reels under the unprecedented effect of Covid-19, the residential real estate sector in the country showed a marked resilience to its adverse impact. Hence, the real estate sector is seeking for tax sops, a review of the definition of affordable housing, reduction of long-term capital gains tax for real estate and new provisioning for rental housing, among others.
The central and state governments have rolled out several reforms and incentives during the past year to revive the economy from the ill effects of the pandemic.
The demand and supply sentiments in India’s housing segment have witnessed a revival on the back of low home interest rates, government sops like reduction in stamp duties and giving a discount on construction premiums paid by builders.
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Sandeep Runwal, president, NAREDCO Maharashtra, said that “Hopefully, the government will continue to put in its sincere efforts in pushing affordable housing. The cap of Rs. 2 lakh per annum against interest rate deduction under section 24(b) of the Act needs to be hiked to at least Rs. 5 lakh along with removing the Rs 45 lakh cap from affordable housing, which will boost the affordable and mid-segment housing in a big way.”
Amendment to section 80C of the Income Tax Act, 1961 to increase the limit for repayment of housing loan principal or alternatively introducing another section for deduction with respect to repayment of housing loan principal is also among the key suggestions made by realty developers.
Another thing that the realtors are expecting is that the government continues promoting the affordable rental housing schemes by announcing tax reliefs for rental housing projects, which will fast track the pace of investments in these schemes. The government’s commitment to boost both affordable and rental housing will help achieve their overall goal of housing for all.
Radha Dhir, chief executive officer and country head, India, JLL, said: “The progress of the Special Window for Affordable & Mid-Income Housing (SWAMIH) fund in achieving the objective of completion of stalled projects is bearing results, the allocation for the fund should be increased further. The government should float similar funds for rental housing projects.”
For affordable housing, developers have additionally suggested increasing the limit on value of the house to be raised to Rs 75 lakh in non-metro cities and Rs 1.50 crore in metro cities from the current ceiling of Rs 45 lakh.
To further attract small home buyers, it is believed that if the government can reduce the charges on stamp duty, it will effectively boost the real estate market. “Last year when Maharashtra and Karnataka reduced their stamp charges from 5 per cent to 2 per cent, it led to a positive outcome as there was a rise in housing sales and at the same time,” 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) should be extended. The Credit Linked Subsidy Scheme (CLSS) and the timeline to avail its benefit under the Pradhan Mantri Awas Yojana for Middle Income Groups may be extended until the budgetary allocation is not utilized, industry experts suggested.
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