Impact of budget on the real estate sector.
After the various assumption and expectations, we finally have the union budget. On 1 February 2022 finance minister, Ms. Niramala Sitharaman presented the union budget for the financial year 2022-23.
From cryptocurrency to agriculture and technology, the budget has a huge announcement for every sector. The central government has allocated nearly Rs. 39.45 trillion money to the total expenditure in the budget of 2022-23. Out of which Rs 7.5 trillion is allocated for capital expenditure which is 35.4 percent higher than the last year. Experts are hoping this will help to jump CAPEX around 15 percent in FY23.
But, what is there for real estate in the budget? Has the budget lived up to the expectations?
It is the question whose answer you want to know. So without further delay, let me tell you there is good news for the real estate sector in the budget. The Government has allocated Rs 48000 crore for affordable housing under the Pradhan Mantri Awas Yojna for urban areas.
The central government is aiming to build 80 lakh affordable homes for the middle class and economically weaker sections. It will give a much-needed boost to the affordable housing sector and the real estate industry after the pandemic. So if you are thinking to buy a Residential plot in Greater Noida or any other urban area, you will get benefits under the Pradhan Mantri Awas Yojna.
Besides, there are various other important announcements respected FM has made on the budget for the real estate industry. Let’s look at those in brief.
Key highlights of the real estate sector in the budget.
- The central government will work with the state government to reduce the time required for all land and construction approvals.
- The central government joins hands with financial sectors to expand access to capital and reduce the cost of intermediation.
- Middle and lower-income group homebuyers did not get any kind of incentives.
- There was no deduction in the tax on home loans or relief for those who stuck with an incomplete project.
- SEZ act will be replaced with new legislation. It will cover the current industrial enclaves and also increase the export.
- The government will focus on the digitization of land records. States can allocate a unique land parcel identification number to the buyer. This will help to manage the records and easily transfer the documents.
- 1 percent TDS will apply on non-agricultural immovable property of over 50 lakhs.
- Rs 14,100 crore has been allocated for smart cities, Amrut, and the central vista project.
- Rs 2600 crore has been given to the construction of non-residential office buildings.
These are some important highlights from the union budget 2022-23 in the real estate sector.
The union budget is good and bad both for the real estate sector. On the one side, the government focused on affordable housing, digitization, and the public infrastructure sector in the budget.
This creates more employment and cash flow in the industry. But on the other hand, homebuyers are a little disappointed as there is no exemption in tax on interest of home loans. Hence the burden remains the same for them.
The sector is eyeing growth in the financial year. And the budget is in favor of it. We hope the real estate industry will get the needed speed in development after the pandemic in the ongoing financial year.
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