The Indian realty sector saw strong growth in 2021 with home sales increasing to almost 90% of their pre-COVID levels in top Indian cities and new launches touching 2019-figures as per reports. The sector possesses big expectations from the upcoming Union Budget. Experts want the Budget to ensure ready finance availability, lower GST rates and the granting of industry status. They also feel that the rebate of Rs. 2 lakh on home loan interest under Section 24 should be increased to a minimum of Rs. 5 lakh for scaling up demand in the mid-range and affordable categories.
The Founder and COO at Square Yards, Kanika Gupta Shori, stated that stakeholders in the sector desire the increase in the tax education on interest that is paid on home loans, to go up to Rs. 5 lakh from Rs. 2 lakh, bringing more salaried professionals into the segment and helping them fulfill their home-buying aspirations. She added that the decision will help overall housing demand stay at healthy levels while enabling developers to recover from t heir previous losses and also scale up their already wafer-thin margins. Other experts have called for personal tax relief measures, especially a higher deduction threshold under Section 80C and also more incentives for SMEs and MSMEs along with infrastructure spends.
They feel that affordable housing criteria should be tailored on the basis of pricing parameters in diverse Indian cities. The Rs. 45 lakh bracket is not always feasible for this definition in many cities like Mumbai. This should go up to at least Rs. 85 lakh in such scenarios as per experts. For other leading cities, experts feel that this should increase to Rs. 60-65 lakh at least. With more home buyers coming under the affordable housing category with this move, they will get lower GST rates of 1% without ITC, subsidies of the Government and Rs. 3.5 lakh of tax deductions on repayment of home loan interest. Industry stakeholders also anticipate an extension of the Rs. 1.5 lakh added deduction for loans till 31st March, 2022. Many feel that the budget should emphasize consumer spending and overall investments. Some hope for lowered TDS for NRIs on real estate transactions while offering relief on tax penalties on differences between agreement value and circle rates of property units.
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Published Date: Jan 17, 2022
