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The Real Estate fraternity was looking forward to the Budget 2020 as a host of policies pertaining to fiscal packages, tax reliefs to drive demand, single-window clearance to developers was expected. The industry was also anticipating a detailed roadmap for infrastructure spending & a slew of incentives for the Affordable Housing segment.
So far, nothing extraordinary has been announced. However, the government has taken some notable steps towards the continuation of its previous policies. In the previous instalment, the Finance Minister had announced an additional deduction of up to INR 150,000 for interest paid on loans taken for the purchase of an affordable house. The deduction was allowed on housing loans sanctioned on or before 31st March 2020. In order to further support the sector, the FM has extended the date of loan sanction for availing this additional deduction by one more year.
Likewise, a tax holiday was proposed for developers of affordable housing projects approved by 31st March 2020. The date of approval has been further extended by a year in order to incentivize developers of such projects.
In order to revitalize the NBFC sector, the limit to avail debt recovery has been eased out to an asset size of INR 100 crore from the existing size of INR 500 crore.
More concessions will be provided while taxing income from capital gains. A simplified tax regime has also been proposed. Such incentives can give an incremental push to the housing demand in the country.
Overall more could have been done to revive the sector, which is suffering from huge piles of stalled inventory. A healthy Real Estate sector, after all, plays a pivotal role in the economic growth of the nation as well and reinvigorating the industry will enable sustainable & long-term gains.
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