Housing Industry is finally being recognised: Rajesh Prajapati, MD, Prajapati Constructions

It is probably the first time that affordable housing has been defined in terms of size and not the value of flat

  • Updated On Mar 1, 2016 at 08:53 PM IST
By Rajesh Prajapati, MD, Prajapati Constructions

The Union Budget 2016-is a great Budget for the affordable housing sector. The Finance Minister has offered sops to the affordable housing and has laid out definite direction in this budget towards implementing the ambitious Housing For All by 2022.

100% tax deduction to entities constructing 30 sq mtr houses in 4 metros n 60 sq mtrs in other areas is a major booster to the affordable housing sector. Also, it is probably the first time that affordable housing has been defined in terms of size and not the value of flat. It seems that the Housing Industry is finally being deservedly recognized as one of the major contributor to the GDP of the nation.

The exemption of service tax on construction of houses up to 60 sq mtr is a welcome step. This will provide relief to a section of home buyers opting for 1RK / 1BHK / small 2BHK flats. Similarly, the additional deduction of Rs 50,000 on interest payment for first home buyers on house value of up to Rs 50 lakhs is a welcome step. However it will have limited impact as it leaves out a large section of home buyers in metro cities.

It would have been better if the Government would have extended this additional tax exemption for homes valued at Rs 1 crore for tax deductions in Metro cities. Commercial and retail market will benefit from REIT as tax exemption from DDT to SPVs as well as Funds will give a boost to these funds and facilitate easy flow of much needed funds.
  • Published On Mar 1, 2016 at 01:58 PM IST
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