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February 1 is the day of expectations for every citizen and for every sector and industry of this country. Real estate too expects the government to dole out a few goodies and lift the spirits of a pandemic-battered segment.
Home loan borrowers expect more benefits on their interest payments and principal component that offers them better tax saving opportunities and allows them to spend more freely. The present exemption on the interest component under Section 24 of the Income Tax Act is pegged at ₹2 lakh; an increase in the limit by ₹50,000 would be welcomed. On the principal component the exemption limit is ₹1.50 lakh under Section 80C, and here too another ₹50,000 exemption is on everybody’s wish-list.
Additional tax benefits are provided under Section 80EE and 80EEA; amounts of ₹50,000 and ₹1.50 lakh respectively can be claimed. Under Sec 80EE if the home loan is disbursed between April 2016 and March 2017 and the value of the house does not exceed ₹50 lakh and the loan amount is under ₹35 lakh, an amount of ₹50,000 can be claimed as exemption. Under Sec 80EEA if the loan sanctioned period is between April 2019 and March 2021 and the value of the house does not exceed ₹45 lakh, an exemption of ₹1.50 lakh can be sought. And borrowers are hoping for an increase in the exemption limits under these two Sections.
Industry expectations
The real estate sector expects the government to award the official “industry” status and widen the scope of affordable housing which would help increase the number of home buyers. With the pile of NPAs due to non-payment of loans, one-time restructuring norms would also be a good announcement in this Budget. Setting up of a special committee to address stressed projects is another sop expected by the segment.
During last year’s Budget SWAMIH was set up to focus on issues with stalled projects which was received well; this year the sector expects extension of last-mile funding which is stressed due to the pandemic.
The sector looks to increase the buying demand and such possibilities can happen only when buyers are motivated through sops and benefits that this Budget can offer.
