Budget 2019: A major boost to Government’s vision of “Housing for All”

Principal emphasis is on tax deduction on house loans, tax holiday on cost-effective housing models and promotion of rental housing.
Finance Minister Nirmala Sitharaman presented her maiden Union budget on Friday. One of the key announcements were an additional deduction of Rs 1.5 lakhs on house loans borrowed up to March 31, 2020, for purchase of house up to Rs 45lakhs. This deduction is provided in addition to the existing interest deduction of Rs 2lakhs, the Finance Minister said in her speech.
With rapid urbanization a reality, this tax rebate has the potential to boost the Government’s ambition of “Housing for All”. Sitharaman said that people of India will now get a combined interest deduction of Rs 3.5 lakhs on house loans worth Rs 45 lakhs.
To facilitate such vision, the FM announced a tax holiday on profits earned by all the developers with active affordable housing projects.
Furthermore, the Government of India is not limiting their efforts of affordable housing to construction as it continues to work towards the vision of improved living standards for everyone. Aligned with the same, Nirmala Sitharaman proposed to increase the carpet area from existing 322 sqft to 645 sqft in metropolitan regions and from 645 sqft to 968 sqft in non- metropolitan regions.
For calculation of the long- term gains achieved from immovable properties, Finance Minister shifted the base year from existing 2001 to 1981.
In a move to promote rental housing, Sitharaman said that modern tenancy act will be shared with states to promote house renting. “The current rental laws are not updated as they do not address the relationship between the lessor and the lessee realistically and fairly. A Model Tenancy Law will be finalized and circulated to the states soon,” she said.

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