The third Union Budget by Finance Minister Arun Jaitley is being hailed across sectors in the country. Real estate, the industry reeling under a slump for a long time, has had most of its expectations met by the budget as Jaitley has made a concerted attempt to make a budget that is well balanced and pragmatic.
HM Group, a leading realtor of Bangalore with 57 completed projects, said that the budget will surely work well as three major expectations of the real estate sector have been addressed – removal of DDT from REITs, increased HRA deduction, and boost to affordable housing by allowing 100% deduction on profits made by entities constructing them.
“Scrapping of dividend distribution tax on Real Estate Investment Trusts (REITs) will definitely help realtors in raising money from investors,” said the official spokesperson of HM Group. He added, “100% deduction to undertakings in the affordable housing sector will boost the industry. The hike in HRA from 24,000 to 60,000 will be positive for the middle income class.”
Jaitley’s announcement of no service tax for houses built less than 60 sq. meters in non-metro and 30 sq. mt. in the four metro cities is expected to boost the middle classes and the whole sector overall as the largest segment of home buyers in the country comprises the middle class.
What has come as an added blessing is the additional exemption of housing loan interest of 50,000 provided value of house does not exceed Rs 50 lakh.
“Though the budget has been positive and balanced, FM’s assurance to pursue implementation of GST, reform measures pending before parliament has raised the hopes of the industry. This year’s budget has been reasonably better than the previous two. We are hopeful about government considering other demands of the industry too including conferring industry status, subsidized land rates, and single window clearance,” said HM Group.