Budget 2024: The real estate sector is vital to India’s socio-economic framework, continually driving economic progress and urban growth despite global and domestic challenges.
The sector anticipates an increase in the interest rate deduction cap under Section 24(b) from Rs 2 lakh to Rs 5 lakh per annum. Personal tax relief through reduced tax rates or revised slabs is also expected. Reinstating a separate section for home loan principal repayment and waiving Income Tax on rent for three years would further benefit the sector.
High construction material costs have raised property prices, affecting housing demand. Reducing GST on under-construction properties and lowering raw material prices are crucial. Increased investment in infrastructure, including roads and ports, is needed, along with extending the Credit-Linked Subsidy Scheme (CLSS) and introducing new asset classes in Real Estate Investment Trusts (REITs).
The current affordable housing cap of Rs 45 lakh is insufficient, particularly in metropolitan areas. Raising the cap to Rs 60-65 lakh could better support homebuyers. Increasing it to Rs 1 crore in metro cities would significantly enhance both affordable and mid-segment housing.
The sector anticipates incentives for green building practices, such as tax benefits for eco-friendly technologies and subsidies for green materials. Incentives for homebuyers opting for certified green homes would also be welcomed.
Developers face delays due to multiple approval requirements. A single-window clearance system for all real estate transactions would reduce these delays and improve efficiency.
Lowering stamp duty rates for first-time homebuyers is essential. Initiatives like stamp duty offers and reviving the CLSS under PMAY would incentivize first-time buyers in the affordable segment.
Expanding the SWAMIH (Special Window for Affordable and Mid-Income Housing) investment fund or introducing new mechanisms to complete stalled projects could benefit all stakeholders.
A reduction in long-term capital gains tax on property from 20 percent to 10 percent is sought to attract more investment and boost economic growth.
The Union Budget 2024 presents opportunities for transformative changes in the real estate sector. Addressing tax relief, infrastructure investment, and policy reforms can drive sustainable growth and enhance the sector’s contribution to India’s prosperity.
By Anamika Singh, Founder, StraCon Business Services.
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