By Accommodation Times Bureau
By Dr Sanjay Chaturvedi
Union Budget have five main objectives which includes figures and sectors like Agriculture, Power, Infrastructure and Banking in mind. As predicted by this paper earlier when president’s speech was delivered, the real estate will see a step motherly treatment, this time too.
Some of the provisions of the union budget w.r.t. Real Estate:
1. Service Tax from 10% to 12%
2. FDI in Retails allowed with some riders.
3. Separate Amendments proposed in Indian Stamp Act, NHB Act.
4. Capital Gain Tax Saving bonds limits up by Rs.60,000/- crore, where HUDCO, NHB, IDFC, NHAI and IRFC are allowed to issue bonds.
5. Delhi Mumbai Corridor allocated Rs.18500 Cr.
6. External Commercial Borrowing (ECB) Allowed in affordable and low cost housing.
7. 1% interest rate subsidy allowed on house upto Rs.20 lkah on loan of Rs.15 Lakh.
8. Rs.10,000/- on Bank interest no need of filing returns.
9. Tax Audit limits raised from Rs.60 Lakh to Rs.1 Cr.
10. No Service Tax on construction of residential buildings and individual units upto 50 sq.mtrs.
11. For the year 2011-12, tax-free bonds for ` 30,000 crore were announced
for financing infrastructure projects. I propose to double it to raise `60,000 crore
in 2012-13. This includes `10,000 crore for NHAI, `10,000 crore for IRFC,
`10,000 crore for IIFCL, `5,000 crore for HUDCO, `5,000 crore for National
Housing Bank, `5,000 crore for SIDBI, `5,000 crore for ports and `10,000 crore
for power sector.
• Allow ECB for low cost affordable housing projects;
• Set up Credit Guarantee Trust Fund to ensure better flow of institutional credit for housing loans;
• Enhance provisions under Rural Housing Fund from ` 3000 crore to ` 4000 crore;
• Extend the scheme of interest subvention of 1 per cent on housing loan up to `15 lakh where the cost of the house does not exceed `25 lakh for another year; and
• Enhance the limit of indirect finance under priority sector from
` 5 lakh to ` 10 lakh.
13. In order to provide low cost funds to some stressed infrastructure sectors,
the rate of withholding tax on interest payments on external commercial
borrowings is proposed to be reduced from 20 per cent to 5 per cent for three
years. These sectors are:
• roads and bridges;
• ports and shipyards;
• affordable housing;
• fertilizer; and
14. Investment linked deduction of capital expenditure incurred in the
following businesses is proposed to be provided at the enhanced rate of 150 per
cent, as against the current rate of 100 per cent.
• Cold chain facility
• Warehouses for storage of food grains
• Affordable housing
15. Construction services relating to specified infrastructure, canals, irrigation
works, post-harvest infrastructure, residential dwelling, and low-cost mass
housing up to an area of 60 sq. mtr. under the Scheme of Affordable Housing in
Partnership are also included in the exemptions. To make the life of those who
already own an apartment a little easier, I propose to raise the exemption for the
monthly charges payable by a member to a housing society from ` 3,000 to
16. Exemption from Capital Gains tax on sale of residential property, if sale consideration
is used for subscription in equity of a manufacturing SME for purchase of new plant and