After much anticipation and expectation, the budget finally presented today by the honorable finance minister P.Chidambaram with extreme care, precision and intellect that it sweetened the ears and jollied many, but pulled down market very badly. As usual the budget is polished with quotes that generates optimism by expressing the idea of making the country one of the top economy in the near future and maybe in 2025 India will become a $5 trillion economy. However we all know the present deficient situation that has largely fallen GDP compared to previous years. But this year’s Budget has countless candies for everybody. From heavy fund allocation for food security bill to women and child welfare or from education and jobs to the direct taxes, everything is covered up in a positive way. Analysts have bewildering reviews: some say good and some say not-so-good. But focusing on the real estate, the budget has the power to fill immense energy in the sector. It is consumer-friendly in all ways.So let’s take a look at the key points that budget 2013-14 offered for powering real estate:
- Any person taking a home loan (for the first time) up to Rs 25 lakh during the financial year 2013-14 will be allowed an additional tax deduction of interest of up to Rs 1 lakh. This will fuel housing sales in tier-II and tier-III cities where the cost of homes is not very high. Otherwise in bigger cities and metros where properties are mostly more than Rs 35 lakh, this offering will have no impact. But a sense of encouragement will arouse in the middle and lower income groups.
- Rs 2,000 crore for urban housing fund and Rs 6000 crore for rural housing fund is announced. The urban housing fund will be set up by National Housing Bank and help in meeting the demand for affordable housing by the creation of new and affordable house. Currently there is a deficiency of around 18.78 million homes in the country mainly in EWS and LIG categories. If the amount is utilized property, then a better future for all those who are living in slums and are in great need of a house can be expected.
- Giant leap in the field of infrastructure is taken by the finance minister by announcing Rs 50,000 crore of tax free bonds to raise money for infrastructure. Four Infrastructure debt fund have also been registered. A push on infrastructure by development of two towns along the Delhi-Mumbai industrial corridor.
- Luxury homes to get expensive. As FM had reduced the abatement on service tax availed by real estate developers for homes and flats above 2,000 sq ft or costing Rs 1 crore and above to 70% from 75% (earlier).
- Immovable Property transaction: TDS of 1% to be levied on transactions above Rs 50 lakh.
The budget 2013-14 might take the infrastructure of the country to a new level if the allocated funds are used transparently. However the budget is not very ambitions but simple and has something to offer everyone. The budget might not get good reviews from builders but a treat for common people.