New Delhi: Finance Minister Nirmala Sitharaman, who will announce Modi government 3.0’s first and her 7th straight Budget on July 23, 2024, can bring a smile to the common citizen’s face by focusing on affordable housing and undertaking a rejig of tax slabs to ease the commoner’s burden, according to realty sector experts.
Property sales at record highs
The real estate sector has witnessed a boom since the pandemic-related curbs were lifted with residential property sales reaching a decadal high in the first of the current year at 1.73 lakh units sold so far, according to property consultancy Knight Frank.
Affordable homes’ inventory declines
However, the supply of affordable homes has declined 38 per cent in 8 major Indian cities to 33,420 units during the March quarter of 2024, according to PropEquity data. Affordable homes are designated as homes valued below Rs 60 lakh.
Affordable homes inventory stood at 53,818 units in the year-ago period, according to the property sector analytics company.
Inflation hurts
Further, inflation has remained above the Reserve Bank of India’s 4 per cent target despite moderating for 5 straight months to 4.75 per cent in May 2024. However, this figure is expected to jump above the 5 per cent mark in June 2024 owing to the rise in vegetable prices.
In this scenario, experts suggest ways in which the finance minister may use tax levers to ease the common citizen’s burden and provide a boost to affordable housing in India.
Will Budget focus on income tax
How FM can boost affordable housing
Motia Group director L C Mittal said the government may consider raising affordable housing compensation to Rs 3.5 lakh from Rs 2 lakh at present. Another lever that the FM could consider using is to exempt the tax on home loan interest for self-occupied properties up to Rs 5 lakh. which may result in savings of Rs 40,001-45,000 per annum for taxpayers.
It can be prudent to consider hiking the affordable housing cap to Rs 75 lakh from Rs 45 lakh in metro cities and to Rs 50 lakh for non-metros, added Mittal.
The FM may consider a standard deduction of Rs 50,000 on home rental income for taxpayers to promote the building of affordable housing units, said Siddharth Maurya, Founder and MD of real estate comoany Vibhavangal Anukulakara.
Another provision that could boost affordable housing, is the extension of an additional Rs 15 lakh deduction under section 80EEA for first-time homebuyers after March 31, 2024. Maurya reiterated the demand to raise the value of affordable homes to Rs 60 lakh from Rs 45 lakh earlier.
Budget Expectations 2024: Finance Minister Sitharaman can boost affordable housing by using tax levers under the Income Tax Act to benefit the middle class, say industry leaders. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
