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In view of the Corona crisis, in view of the hurdle in the target of providing housing for all by the year 2022, the government may extend the additional tax exemption of Rs 1.50 lakh on cheap houses in this year’s budget for one more year.
Giving information, two related sources said Finance Minister Nirmala Sitharaman may announce this in the budget to be presented on February 1. If this happens, this scheme will take effect on March 31, 2023. The sources said that in this year’s budget as well, the government may put more emphasis on affordable housing, real estate and construction (construction), as which will benefit homebuyers and also create employment opportunities by promoting the related industry. Rajan Bandekar, chairman of real industry body NAREDCO, said interest rates are at a low level, which is a golden opportunity for home buyers. In such a situation, if the government decides to increase the interest subsidy, this industry will get a huge boost.
Who is entitled to the exemption
The additional tax break and interest subsidy under the Affordable Housing Plan can only be taken advantage of by those who are buying their first home. In this, the exemption cannot be given if a house already exists in the name of the husband or wife. Also, its cost should not exceed Rs 45 lakhs.
What is the affordable housing plan?
The government had launched the Affordable Housing Plan in the year 2015 with the goal of providing housing for all by the year 2022. Its goal was to provide housing for two million people. In order to attract more and more people under its jurisdiction, the government has made many changes to it. There is an exemption according to the income of the people. In this, the annual income condition has been kept up to Rs 3 lakh, Rs 3 to 6 lakh, Rs 9 to 12 lakh and Rs 12 to 18 lakh.
Minister of Finance had increased the exemption in 2019
In addition to Rs 2 lakh, Finance Minister Nirmala Sitharaman first announced in July 2019 an additional tax exemption of up to Rs 1.50 lakh on interest. Since then it has been extended by one year in each budget. It was less expected to be extended after the year 2022, but in view of the Corona crisis, it is expected that the Minister of Finance may extend it for one year this time as well.
Removed Rs 45 lakh limit – real estate
The government has imposed a limit of Rs 45 lakhs for the affordable housing exemption. Anuj Puri, chairman of property advisory firm Enrock, says the government should remove the Rs 45 lakh limit to make the benefits of affordable housing accessible to more and more people. Rajan Bandekar, president of the royal industry organization NAREDCO, also expressed the same view.