The realty industry, which was impacted heavily because of the coronavirus pandemic and economic downturn, has received a much-needed booster shot in the budget presented by the Finance Minister Nirmala Sitharaman on Monday. The government has responded positively to the realty industry’s demand by extending the period for extra deduction of Rs 1.5 lakh available for loans up to March 31, 2022. Further, the FM has proposed extension of the tax holiday for one more year.
ANAROCK CMD Anuj Puri said the union budget was literally a make or break even considering the ‘’Margaret Thatcher moment.’’ ‘’As anticipated affordable housing and rental housing got a big boost with the extension up to March 31, 2022 for extra deduction of Rs 1.5 lakh available for loans. This will keep demand buoyant for affordable housing in 2021 as well. Further, extending the tax holiday for affordable housing projects for one more year will help bring in more new supply within this segment,’’ he said.
According to ANAROCK Research, affordable housing already accounts for more than 35% of the supply across the top seven cities in the country.
Hiranandani Group MD Niranjan Hiranandani said the FM’s proposals 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 Rs1.5 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. This 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,’’ he noted.
According to Azlo Realty CEO Krish Raveshia the steps like a 1-year tax holiday for affordable housing projects and a 1-year extension for an additional deduction of interest up to Rs 1.5 lakh on loan for affordable housing will benefit all stakeholders of the industry and boost investments. Relief on TDS for dividend on REITs and InvITs will boost investment in these instruments.
On the other hand, CREDAI-MCHI President Deepak Goradia asserted that the FM’s proposals will continue to provide support to accomplish the ‘’Housing for All Mission.’’ However, he said there are additional sector specific measures to support/boost towards the Indian realty sector.”