Union Budget 2022-23: Among the direct benefits, the 2022 budget could bring potential relief to direct home buyers with an increased limit of interest deduction on home loans for tax refund from Rs 2 lakh to Rs 5 lakh
Indian Union Budget 2022: Interest reduction on home loans could give PMAY a boost. Reuters
With the EU budget fast approaching, expectations from all sectors are on the rise. With economic advisers expecting India’s growth to be between 7% and 7.5%, the government will mainly focus on crafting a growth plan to lift the economy out of recession. COVID-19 crisis. The nation foresees a greater focus on the development of healthcare, infrastructure, affordable housing, MSMEs, startups and innovations.
The last two years have been marked by great pressure on all sectors; however, the residential finance and real estate sectors saw a larger drop with lower demand and lower investment. Although the sector is now accelerating with the top eight cities claiming near pre-pandemic era market share, individuals, investors and the entire industry are eagerly awaiting higher support from this budget. of the Union, to continue this growth.
Speculation is that the government will bolster the affordable and rental housing agenda with a strong roadmap to enable the sector to be ready for the future.
The litigation over mortgage tax reduction and increase in allowance to the Ministry of Housing and Urban Affairs by Rs 54,581 crore, was one of the biggest successes of the 2021 budget. expected proposals such as interest deduction on mortgage rates, infrastructure upgrades and increased capitalization of real estate, monetization of additional income to build higher assets, etc., will propel the Prime Minister Narendra Modi’s vision of housing for all under Pradhan Mantri Awas Yojana (PMAY) and strengthen the existing financing system.
Boost for buyers and investors
Among the direct benefits, the 2022 budget could bring potential relief to direct home buyers with an increased limit of home loan interest deduction for tax refund from Rs 2 lakh to Rs 5 lakh. In addition, personal tax relief, either with tax cuts or with a review of tax slaps, could support the sector with increased demands since the last increase in the deduction limit in 2014.
Buyers will furthermore look forward to responding to industry demands with ease of financing and GST rate reductions. If these expectations are met in the next budget, it will improve taxpayers’ disposable income and lead to consistent growth for the sector.
Maintain industry support
According to the Ministry of Housing and Urban Poverty Alleviation, affordable housing is defined by the size of the property, its price and the income of the buyer. In the next fiscal year, the government may also consider redefining the affordable housing criteria to extend the benefits of the additional deduction to a wider market.
Also, if the government extends the deadline for public housing projects with the added benefits of reduced stamp duty, reduced long-term capital gains tax for real estate, of an extension of the CLSS scheme under the PMAY for Middle Income Groups (MIGs) and unlocking more government-controlled land, this will allow industry to use the allocated funds and make the process more sustainable. more convenient purchase.
The author is CEO, Reliance Home Finance.