It is heartening to note the Government’s focus on “Housing for All” and affordable housing as priority areas.
Some of the proposed laudable steps related to the housing segment will certainly give a fillip to the buyers of affordable homes as the time period of taking loans to buy such homes have been increased by another year i.e. – till March 31, 2022. This will help consumers to continue to avail additional tax benefits of Rs. 1.5 lakh u/s 80EEA of the Income Tax Act for another year. By extending the period by one more year, the Government has clearly indicated its emphasis for the affordable segment of housing. Section 80 EEA provides tax benefit up to Rs. 1.5 lakh on the interest paid on loans taken for affordable residential housing. This benefit is over and above the tax benefit of Rs. 2 Lakh available u/s 24 (B) of the Income Tax Act on interest on the housing loan.
It is heartening to note the Government’s focus on “Housing for All” and affordable housing as priority areas. Additionally, the announcement of tax holiday for the affordable housing developers for one more year for developing affordable rental housing projects as a part of the Pradhan Mantri Gareeb Awas Yojana- Urban to ensure affordable housing for the migrant workers is admirable.
Needless to add, these proposed steps will strengthen the overall real estate sector and boost confidence amongst buyers and builders alike. However, if long standing demands of the sector like granting industry status, rationalising the GST rates (by allowing the input tax credit), access to funds and ensuring longer repayment cycles, lowering tax on raw materials, and increasing Rs. 2 Lakh tax rebate on housing loan interest rates to at least Rs. 5 Lakh could have been taken – it would have gone a long way to support the real estate developers and generate healthier housing demand. This would have had a lasting positive ripple effect on the national economy.
J C Sharma is the Vice Chairman & Managing Director of Sobha Ltd.