The Union Budget 2014-15 might not meet all of the real estate sector’s expectations but its proposal does show that the real estate sector is once again headed in the right direction, according to Anuj Puri, Chairman and Country Head, JLL India.

 

According to him, some of the welcome moves in the housing sector include the allocation of Rs 4,000 crore for low-cost housing schemes and indicating the relaxation of FDI norms for the affordable housing sector.

 

“It is positive that the Government has taken due note of the demand-supply mismatch in the LIG and EWS housing segments, and it remains to be seen how fast these initiatives hit the ground in real time,” he said.

 

The increase in income tax deduction limits — from Rs 1 lakh to Rs 1.5 lakh under 80C (of which the repayment of principal on housing loans is a component) and increasing the deduction limit on interest payment for housing loans to Rs 2 lakh (from Rs 1.5 lakh) — will lead to a vastly improved sentiment on the housing markets.

 

Further indirect benefits have been provided for the residential sector in the Budget by increasing the individual income tax exemption limit from Rs 2 lakh to Rs 2.5 lakh. This will increase the disposable income of individuals and have further implications on their ability to service home loans.

Related Topics