The Union Budget 2024 can significantly support the continued growth and resilience of the Indian housing finance industry, ultimately benefiting the broader economy. As the Union Budget 2024 approaches, it is crucial to introduce measures that will bolster this economic context.
Key Expectations from the Union Budget 2024:
1. Tax Incentives for Homebuyers and Real Estate Investors:
– Increase in Deduction Limits: Raise the deduction limit for interest payment on home loans from the existing ₹2 lakh per year to ₹5 lakh to add momentum to housing demand.
– Long-Term Capital Gains: Bring long-term capital gains at 10% on par with equity shares.
– Municipal Charges: Exclude municipal charges from the purview of GST.
– GST Reduction: Reduce GST on under-construction properties to make homes more affordable.
2. Affordable Housing:
– Redefine Affordable Housing: Broaden the definition of affordable housing to expand the benefits for homebuyers, thereby boosting end-user demand.
– Interest Subsidy: Provide an interest subsidy for first-time homebuyers to boost sales in the real estate sector.
3. Tax Exemption on Income from Rentals:
– Introduce tax exemptions for rental income to encourage greater investment in residential real estate.
4. Industry Status & Budgetary Support:
– Industry Status: Grant “Industry” status to the housing sector to incentivize growth and attract significant investment.
– Budgetary Allocation: Allocate funds from the Special Window for Affordable and Mid-Income Housing (SWAMIH) fund in the upcoming union budget for FY 2024-2025 with relaxations, including allowing input tax credit under GST and providing incentives for rental housing to achieve the housing-for-all targets.
By addressing these expectations, the industry will not only drive growth in the real estate sector but also stimulate demand in various ancillary industries, thereby boosting job creation across these sectors.
Overall, the hope is for policy measures that foster sustainable growth and address key challenges facing the industry in the upcoming budget.
The author, Pramod Kathuria is Founder and CEO of Easiloan.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 10 Jul 2024, 05:50 PM IST