Union Finance Minister Nirmala Sitharaman on Monday presented the Union Budget 2021-22. Reacting to budget, Dr. Niranjan Hiranandani, National President NAREDCO, said, “It is a get well soon type of Budget, the ‘V’ shaped recovery being powered by the COVID vaccination program.”
On real estate aspects, Dr. Niranjan Hiranandani said: "The proposals for the annual budget reinforce the Government’s focus on affordable housing. For the home buyer, the second extension of the deadline till 31 March 2022 for the additional Rs 1.5 lakh tax deduction given on loans taken to buy a house in an affordable housing project is welcome, as is the developer whose affordable housing projects also get an extension for tax benefits, for projects completed till March 31, 2022. Similarly, tax exemption for notified affordable housing for migrant workers, and the deduction on payment of interest for affordable housing being extended by a year will give a fillip to this emerging segment. As affordable housing attracts only 1% GST and Rs 1000 stamp duty in the state of Maharashtra will augment the production of affordable housing in the state. The enhanced spending on public infrastructure projects like ports, railways, airports, warehousing, gas pipelines, metro, economic corridors is laudable and welcomed by industry that will give impetus to the employment generation and attract the essential investment to lift up the economic revival."
Dr. Niranjan Hiranandani further added that the strong focus on “digital covering setting up of a Fintech hub at Gift City, seen in sync with moves to enhance digital payments and use of Artificial Intelligence and Machine Learning, etc. in governance, will give a fillip to creation of Digital India.”
On Monday, the government extended the additional tax deduction of Rs 1.5 lakh on interest paid on housing loan for purchase of affordable homes to March 31, 2022, a move aimed at boosting demand in the sluggish real estate sector.
The additional deduction of Rs 1.5 lakh over and above Rs 2 lakh was introduced in the 2019 budget. This was allowed for those buying homes for the first time and of up to Rs 45 lakh.
In the budget speech for 2021-22 fiscal year, Finance Minister Nirmala Sitharaman said the government sees 'Housing for All' and affordable housing as priority areas. "In the July 2019 Budget, I provided an additional deduction of interest, amounting to Rs 1.5 lakh, for loan taken to purchase an affordable house. I propose to extend the eligibility of this deduction by one more year, to 31st March 2022," she said.
The minister said the additional deduction of Rs 1.5 lakh shall therefore be available for loans taken up till March 31, 2022, for the purchase of an affordable house. Now, a person purchasing an affordable house will get an enhanced interest deduction of up to Rs 3.5 lakh.
"Further, to keep up the supply of affordable houses, I propose that affordable housing projects can avail a tax holiday for one more year - till 31st March, 2022," Sitharaman said. The minister said that the government is committed to promote supply of affordable rental housing for migrant workers. "For this, I propose to allow tax exemption for notified Affordable Rental Housing Projects."
(With inputs from PTI)
