00:00With Union Budget 2425 set to be tabled in July, the real estate sector pins renewed
00:06hope on the Modi 3 regime. Expectations are high for tax relief and other sentiment boosters.
00:13And the future of the industry also depends on the unfettered infrastructure deployment
00:18to support and improve urban living standards, as well as develop and promote newer areas.
00:24Now while the usual wish list includes giving industry status for the sector, it is more
00:30imperative now to revive the affordable housing segment, which has had a lacklustre performance
00:36since the pandemic. The current growth trajectory in the housing segment is today largely skewed
00:42towards mid-range and premium housing. And considering the fact that specific housing
00:48needs of India's lower-income groups, this momentum cannot ride solely on higher-priced
00:54homes, while affordable housing continues to languish. Many interest stimulants that
01:01were previously extended to buyers and developers of affordable housing have all expired in
01:07the last two years. And this important segment must be revived with high-impact measures
01:13like tax breaks for developers so that they can focus more on affordable housing and for
01:18buyers to improve affordability. So some of the measures that can reignite affordable
01:25housing would be credit link subsidy scheme under PMAY. So this scheme for the EWS and
01:32the LIG segment that expired in 2022 should be revived so as to incentivize first-time
01:39buyers of affordable homes across the cities. Then secondly, the government can consider
01:47to reintroduce 100% tax holiday for affordable housing developers in order to boost supply
01:54and incentivize developers to build more affordable housing. So basically this 100% tax holiday
02:03benefit was previously enjoyed under Section 80 IBA in the Finance Act 2016. Under this
02:10section, it provided major tax relief on the profits earned from developing and building
02:17the affordable housing projects. Then thirdly, the government can also tweak the definition
02:22of affordable housing criteria in order to widen the additional deductions benefits to
02:30more buyers. For instance, the government can consider revising the pricing of homes
02:37within the affordable housing budget, taking into consideration the city-specific market
02:42dynamics. For instance, in a city like Mumbai, less than INR 45 lakh budget is meaningless.
02:52It would need to be increased to at least 85 lakh rupees and similarly in other top
02:58cities the budget should also be increased to about 60 to 65 lakh. So with such price
03:05revisions, more homes would qualify for the affordable pricing tax and hence more buyers
03:10can avail benefits such as lower GST rates at 1% without ITC and other government subsidies etc.
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