The much awaited Budget 2013-14, had been held on 28th of February and the players in real estate sector are not very excited about the decision made by Finance Minister P. Chidambaram. Moreover, it is a mixed of little heat and disappointment.
This budget has been formulated keeping the idea of promoting affordable housing sector in mind. The finance minister has elevated tax deduction limit up to Rs 1 lakh over and above additional deduction of Rs 1.5 lakh for the person who is taking a home loan up to 25 lakhs. This deed is basically to boost the housing sales in tier 2 and tier 3 cities and it is also expected that more availability of affordable housing would bring down the housing scarcity facing poor and lower middle class people in the capital. Though the real estate sector did not get the industry status as all the realtors and developers were expecting but worth rupees 2000 crore fund have been dedicated for building dwelling units in outskirts of the city and in the rural areas. This fund availability would make it easily accessible of cash flow for affordable housing developers.
Industry experts are enthused by this move, “The budgetary announcements this year translate to a loud and clear message for real estate announcements this year translate to a loud and clear message for real estate and construction sector. As in the past few years, the government has recognized the importance of funding infrastructure through sufficient government allocation to schemes and encouraging foreign investment. This is indicated in the bold step of doubling the outlay for JNNURM and Rs 1 trillion target for infrastructure investment”.
While the luxury residential has been costlier levying extra service tax on a property over 2000 sq feet or over Rs 1 crore of prices, excise duty is also increased on marbles from 30% to 60%. The TDS on agricultural land has been exempted. This decision furthermore, can encourage investors to invest on agricultural land.
By Priyanka Das, 1 March 2013, New Delhi