With the upcoming Union Budget 2017, the professionals or experts are anticipating a dawn of regulations clarity and an onset of a new environment with RERA to boost the real estate sector of India.
Recently, the government announced the rebate of interests by 3 percent and 4 percent on loans up to Rs. 12 lakh and Rs. 9 lakh respectively. This was made applicable under the Pradhan Mantri Awas Yojana (PMAY). This announcement will benefit two new income categories which therefore will be to avail higher loans at interest subsidies. Now when the budget for the year 2017 is released, the actual definition of beneficiaries will be clarified.
Further, the budget will also throw more light on the fact whether the first-time home buyer looking for an affordable project will be able to get additional incentives on income tax for at least five years. It is very clear that with any efforts in this direction will initiate closeness towards delivering ‘Housing for All by 2022’. This step will also help those people who are living in rented apartments by allowing them to move into their own apartments since institutionalized rental housing lacks in Indian cities.
For the buyers in the metropolitan cities, the tax deduction limit for housing loans should be increased by the government. Right now, the limit is set to Rs. 2 Lakh which is irrelevant in cities like Mumbai where the houses are priced near to 1 Crore or above. Moreover, the introductions of tax concessions on house insurance premiums will encourage the end-users to ensure their homes.
Now, that the structure on goods and services tax (GST) tax has been announced, the sector is waiting to see about the tax rate which will be applied to the real estate and construction industry.
Persons who get salaries get house rent allowance (HRA) and therefore claim a deduction in tax. The deductuion in such cases can be higher for fixed salaried people but for those who are self-employed or draw lump sum pays without any kind of HRA can only claim deduction which is the maximum of upto Rs 2,000 a month under Section 80GG. This should be addressed.