Anticipations within the real estate sector and among homebuyers center on the expectation of an increase in the deduction limit for home loan interest payments, which has remained stagnant at Rs 2 lakh annually since 2014. The Finance Minister, Nirmala Sitharaman, is gearing up to present an interim budget for 2024, with stakeholders hoping for some of their concerns to be addressed, such as adjustments to home loan interest deduction limits, reevaluation of affordable housing criteria, and recognition of the sector’s industrial status.

One key expectation is the elevation of the current Rs 2 lakh tax deduction on home loan interest to at least Rs 5 lakh, a move deemed crucial for boosting housing demand, particularly in the affordable housing segment. Additionally, there’s a call for recalibrating the concept of affordable housing to align with current market dynamics, as well as advocating for nationwide price thresholds to qualify as affordable housing, with suggestions for increases in major city budgets to make homes more accessible to a broader range of buyers.

Granting industry status to the real estate sector is also a longstanding demand, aimed at streamlining processes for developers and unlocking various benefits. Rationalizing capital gains tax, particularly by decreasing the current 20% rate, and promoting investment in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) through favorable tax policies are other measures being urged to stimulate investment and bolster the sector’s growth.

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Source : Money Control