Rs 1.5 lakh benefit on interest paid on affordable housing loans extended by a year; Tax holiday for developers; industry hails initiatives
The incentives announced by the finance minister would boost affordable housing projects in the country, say developers, finance companies and consultants.
Finance Minister Nirmala Sitharaman in the Budget 2020 proposed to extend the Rs 1.5 lakh benefit on interest paid on affordable housing loans by a year to March 2021.
Tax holiday for affordable housing developers was also extended by a year.
Affordable housing projects are given a deduction under Section 80IBA of the Income Tax Act. To promote Housing for All by 2022, the sunset date for taking approval was extended till March 31, 2020, in the Interim Budget 2019.
Ravindra Sudhalkar, ED & CEO, Reliance Home Finance said,” The move to extend tax sops to affordable housing projects for another year is a step in the right direction to encourage developers of affordable housing projects. It will enable the government to meet its objective of providing Housing for All by 2022 by reviving development activities”.
Farshid Cooper, MD, Spenta Corporation, said the amended tax slabs will ensure more disposable income in the hands of the middle class. “This could lead to reviving the consumption cycle in the real estate sector and kick-starting the economy. Further, with additional savings, individual investments in housing, especially affordable housing could see an uptick in the near future,” he said.
Anuj Puri, chairman, Anarock Property Consultants, said affordable housing will remain a focus area. He said an increase of 10 per cent in the difference between circle rates and transaction values is a good move.