Housing And Urban Sector Hopes For Surprises In Union Budget Including Tax Exemption

Gauram Debroy of ETV Bharat spoke to stakeholders who want the government to mark a bottom line where people should be exempted from GST.

New Delhi: As Finance Minister Nirmala Sitharaman is all set to present the Union Budget of 2025 in the Parliament on February 1, stakeholders from India’s housing and urban sector are hoping for several surprises in the real estate as well as urban development sector.

Stakeholders have been expecting tax exemption to a certain amount for the housing sector as well as recognition of real estate as an industry. “The government should mark a bottom line where people should be exempted from GST. Because, consumers are already over burdened with different forms of taxes. If they get a certain exemption, this could be a major relief,” renowned architect Indu Sekhar Tripathy told ETV Bharat.

In big cities consumers are suffering from huge GST. The consumers, especially the individual, give taxes in all components. "When someone purchases a Rs 50 lakh flat, he or she needs to pay GST of Rs 9 lakh. If the government exempts GST, it will be a major relief for home buyers,” he said. Tripathy further said such relief would definitely inspire builders and stakeholders from the real estate sector to reach out to the rural areas of the country. “If the government really makes some tax relief announcements, the move will encourage people to invest in building infrastructure in the rural areas,” said Tripathy.

Echoing the same view, National Real Estate development Council (NAREDCO) chairman, Niranjan Hiranandani highlighted the need to make house ownership more affordable by raising the tax deduction limit on home loan interest payments from Rs 2 lakh to Rs 5 lakh. It is worth mentioning that the interest deduction limit for home loans on self-occupied properties at present is Rs 2 lakh under Section 24 of the Income Tax Act. Along with the real estate sector, concerned stakeholders are also expecting major announcements in the urban infrastructure development. “When we talk about urban development, the first thing that comes to our mind is smart cities which is an overall development of a city making it peoples friendly,” said KK Pandey, Professor, Urban Management and Coordinator, Centre for Urban Studies at Indian Institute of Public Administration (IIPA). He said that extension of the smart city mission by including tier 2 and 3 cities in the next phase would definitely give those under-developed cities a chance to progress.

According to Prof Pandey, tier 2 and 3 cities are smaller in size and development in a mission mode programme would definitely encourage them to make progress. “Inclusion of smaller cities under smart city mission would also decongest the capital cities,” he said.