Highlights:

• Union Finance Minister Nirmala Sitharaman announced some measures in the Union Budget 2021
• Income Tax relief on home loans has been extended
• Tax holidays have also been extended for another year

In a bid to revive the ailing real estate sector on the country amidst the global pandemic, the Union Finance Minister, Nirmala Sitharaman, announced a few measures in Union Budget 2021.

To ensure boost, growth and consumption, Sitharaman extended the tax exemption on Affordable Housing for a year.

“This Government sees ‘Housing for All’ and affordable Housing as priority areas,” she mentioned as she was presenting the Union Budget 2021. In the budget which was released in July 2019, the central government provided an additional income tax deduction of up to ₹ 1.5 lakh for home loans to purchase affordable housing. Sitharaman, in the Union Budget 2021, extended the eligibility of this tax deduction till 31 March, 2022.

In order to make sure affordable housing for the migrant workers, the Union Finance Minister also announced the extension of tax holiday for one more year for affordable rental housing projects.

In the Budget 2020, the affordable housing developers were provided with a tax holiday for a year.

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Anuj Puri, Chairman of 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 ₹1.5 lakh available for loans up to 31st March 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.

“Customs duty on steel reduced to 7.5% will create some space to real estate developers who may not be in a position to increase prices immediately,” he added.

The affordable housing project are mainly government focused real estate arena which aim at ensuring housing for all.

Kaushal Agarwal, Chairman of The Guardians Real Estate Advisory said, “The government’s decision to extend tax holiday for affordable housing projects by another year is a step in the right direction to realise the PM’s dream of ‘Housing For All by 2022’”.  

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