NO SOPS FOR HOUSING IN INTERIM BUDGET 2024-25
Typically, when you look for housing sops, what is it that you expect. It would mean special sops for affordable housing. The general demand each year is to extend the limit of exemption under Section 24 of the Income Tax Act to beyond Rs2 lakhs. That limit has not changed for almost a decade. The standard refrain is that the tax exemptions on housing are out of sync with the real estate prices even in smaller towns, leave alone the metropolitan and cosmopolitan cities of India.
The other demand that is normally voiced is to remove the principal repayment from the limit of Section 80C, since that exemption was already quite crowded. Occasionally, there have also been demands for tax benefits for investing in REITs and INVITs. However, this year, the Interim Budget did not touch upon any of these topics. However, that is not to say that it did not give a push to housing. There were a number of macro and subtle announcements that have the potential to boost housing in India. Here is why, the Interim Budget 2024-25 has been important for housing.
A HOME FOR EVERY MIDDLE CLASS FAMILY
Like in the famous Manoj Kumar flick; Roti, Kapda and Makaan have been the 3 pillars of the middle class demands. For most middle class families, an owned property continues to be out of bounds. Towards that end, the Interim Budget 2024-25 has included in its ambit, a scheme to help the middle-income group to buy homes of their own. The idea is that, people residing in rented houses, chawls, slums, or unauthorized colonies would be able to build or purchase their own homes.
Under the massive housing project, Prime Minister Awas Yojana – Gramin (PMAY Rural), the government has already committed to build 3 crore houses and that target is nearing completion and delivery. Now, the finance minister has announced another 2 crore homes under the PMAY Rural scheme, taking the total number of such homes to 5 crore. The additional 2 crore homes will be completed over the next 5 years. However, a lot will depend on the outcome of the elections in the middle of this year. General elections are slated around May 2024. Of course, for this additional list of 2 crore homes, the government will carefully scrutinize the list and only give it for the deserving candidates.
AN INDIRECT BOOST TO HOUSING IS ALSO HAPPENING
While the expansion of the PMAY scheme will be a direct boost to housing, the housing sector is also likely to get a boost indirectly from a number of adjunct factors. Here are some key adjunct points that can have an accretive effect on housing demand.
With housing demand in most of the large cities saturating, the above measures are likely to create a lot of adjunct demand for housing along non-metro corridors. Once again, remember that this was only the Interim Budget. More detailed measures on tax exemptions are likely to come in the full budget in July 2024. It is time to keep our fingers crossed!
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