Sitharaman gives further push to affordable housing projects in Budget 2021

1st February, 2021 | Business Standard

Affordable housing projects are expected to get a boost with the Finance Minister Nirmala Sitharaman’s annoucements for the segment.

Sitharaman proposed to extend the Rs 1.5 lakh benefit on interest paid on affordable housing loans by one year to March 31, 2022. Last year this was extended by a year to March 2021 from March 2020 earlier.

Affordable housing projects are given a deduction under Section 80IBA of the Income Tax Act.

The FM also gave additional tax exemptions for affordable rental housing projects which will be aimed at providing rental housing for migrant workers.

Affordable housing projects will continue to get a boost wih budget proposals. About 60 per cent of housing sales in the country are in this segment, ” said Nirnjan Hiranandani, chairman of Hiranandani Communities.

Hiranandani said the various investments proposed by the FM in sectors such as metros , infrastructure will also benefit real estate.

Anuj Puri, chairman – Anarock Property Consultants said, “As anticipated, affordable housing and rental housing got a big boost with the govt. extending the period for extra deduction of Rs 1.5 lakh available for loans up to March 31, 2022. This will keep demand buoyant for affordable housing in 2021 as well. Further, the extension of the tax holiday for affordable housing projects for one more year will help bring in more new supply within this segment. “

According to Anarock Research, affordable housing already accounts for more than 35% of the supply across the top 7 cities in the country.

Rajesh Narain Gupta, managing partner, SNG & Partners, said,” Sitharaman’s proposal to exempt dividend payments on Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) from TDS will play a key role in boosting global and domestic investor sentiment in the sector.” “This will provide a huge push to the real estate and infrastructure sector of the country will help home-buyers to avail real estate price appreciation benefits without the hassles of price fluctuations and help in boosting the creation of income-generating infrastructure like roads, railways, and power transmission lines,” Gupta said.