Due to the COVID-19 pandemic, for the first time ever a Union Budget went paperless. Considering that the real estate industry had battled adverse repercussions during the pandemic in the form of lower sales and delay in construction of projects, the sector has high expectations from Union Budget 2021.
Finance Minister Nirmala Sitharaman will begin the Budget 2021 announcement shortly. Here's what real estate industry gained from Union Budget 2021:
'Housing for All’ given priority in Union Budget 2021
Under the Union Budget 2021, Housing For All and Affordable Housing were touted as priority areas.
• Rs 1.5 lakh deduction on payment of interest for affordable housing will be extended by 1 year.
• Tax holiday for Affordable Housing projects will be extended till 31st March 2022.
• Government announced tax exemption to be provided for notified affordable rental housing projects.
Infrastructure gets a shot in the arm in Union Budget 2021
Sitharaman unveiled the government's plans on new projects for constructing 8,500 km of highways will be awarded by March 2022. This will boost India’s infrastructure and will further create more job opportunities.
FM announced the breakup on the highway projects in four states-
1)Tamil Nadu will get Rs 1.03 Lakh Crore for construction of 3500 kms of road.
2)Kerala will get Rs 65,000 Crores for construction of 1500 kms of road.
3)West Bengal will get Rs 95,000 Crores for construction of 675 kms of road.
4)Assam will get Rs 3,400 Crores for construction of 1300 kms of road.
- The National Infrastructure which was launched with 6835 projects, will now be expanded to 7400 projects.
- The government will introduce a bill to setup development financial institution with Rs 20,000 Crore.
- Rs 62,000 Crore budget allocated for Chennai Metro while close to Rs 15,000 Crore allocated Bangalore Metro.
FM sets aside Rs 1.15 Lakh Crore for Railways, plans to privatize airports
- Out of the Rs 1.15 Lakh Crore for Railways, Rs 1.07 Lakh Crore will be towards CAPEX
- FM announces Indian Railways National Plan for India for construction of a future ready system by 2030.
- The next lot of airports will be privatized in Tier 2 and 3 towns and cities.
Big boost to NRIs in Union Budget 2021
- Government to notify new rules for elimination of double tax for NRIs on foreign retirement funds.
- The budget also allows NRIs to form a One Person Company (OPC) as before NRIs were exempted from forming OPC in India. This move will benefit the NRIs to enter Indian market with entrepreneurial skills.
Amendment of InvIT and REITs
With an intention to attract more funding into the real estate and infrastructure sector, the FM announced that debt financing of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InVITs) would be enabled. A suitable amendment would be made to the achieve the same.