Cheers for the first time home buyers as the Finance Minister announced that a person taking a loan of Rs. 25 lakhs for his first home will get Rs. 1 lakh additional exemption on repayment of interest component; therefore, the exemption limit has now increased from 1.5 to 2.5 lakhs.
NEW DELHI, February 28, 2013: Finance Minister P Chidambaram presented one of the highly awaited economic blueprint on Thursday, India's 82nd Union Budget, which is for the year 2013-2014. This was Chidambaram’s eighth Budget and had high expectations as it was the final means of reforms before the general elections due in April-May 2014.
Chidambaram was under pressure to better the damaging credit ratings of the country and arrow fiscal and current account deficits. He was expected to announce actions and reforms to keep a cover on government spending in fiscal 2013/14. There were high expectations from experts as well as end users to turn around the economic slowdown, widen the tax net to boost government revenues, lay the groundwork for a goods and services tax, reduce the government's huge subsidies bill, sell more stakes in state-owned enterprises and raise import duties to dampen demand for gold.
For real estate sector and home buyers there were several announcements. The Finance Minister announced that a person taking a loan of Rs.25 lakhs for his first home will get Rs.1 lakh additional exemption. The exemption limit on repayment of interest on home loan has now increased from 1.5 lakhs to 2.5 lakhs. The other highlights for the real estate industry are:
- Measures will be taken to increase investment in infrastructure.
- Infrastructure debt fund to be encouraged.
- Select institutions to be allowed to issue tax free bonds to raise Rs. 50,000 crore to fund infrastructure projects.
- Rs. 6,000 crore to be allocated for rural housing fund in 2013-2014.
- National Housing board to set up Urban Housing Fund with an allocation of Rs. 2,000 crore. Interest Rate subvention scheme will be extended.
- Tax-free infrastructure bonds of Rs.50,000 crore to be issued.
- TDS at the rate of 1% on the transfer of movable property for amount above Rs. 50 lakhs, with the exception of agricultural land.
- Abatement rates to be reduced on luxury apartments.