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Budget 2022: Key Takeaways for Homebuyers from Union Budget This Year!!!
March 15, 2022
The implementation of the ‘Budget 2022’ across the country has brought a major turn of events for the citizens of India and there was no good news for the real estate sector.
After the COVID-19 crisis hit the country in 2020, the pandemic continued to take the growth prospects of this sector to backstage hindering livelihoods of people from the real estate sector, property owners, and buyers equally. So, with more focus on the affordable housing scheme or PMAY scheme of the central government in the budget 2022-23, the real estate industry has been left disappointed.
Before the honorable Finance Minister, Nirmala Sitharaman, announced the Union Budget for 2022 on 1st February, there were several expectations of the homebuyers such as:
- The raise in the ceiling of Section 80C to at least Rs. 2.5 lakh annually and reduce the tax burden from the shoulders of a common man.
- The expansion in demand-side policies such as tax incentives and breaks to enhance the fundamentals of the real estate sector.
- GST exemption with limited time for under-construction projects to the homebuyers will help in lowering the tax burden on the completed projects.
But the prevailing budget mentioned no changes in the income tax slab and therefore ruining the hopes of many.
Table of Contents
Union Budget 2022-23: What It Entails For Homebuyers?
The homebuyer fraternity made some suggestions for the incorporation in the Budget 2022 such reduction of the stamp duty rates and registration charges, subvention scheme, and the revision of home loans tax deductions from Rs. 2 lakh to Rs. 5 lakh. The key features of the Union Budget 2022 were affordable housing, sustainability, and infrastructure.
But this year’s budget has something else in store for them.
Enhancement of Pradhan Mantri Awas Yojana (PMAY)
During the Budget speech, the Finance Minister said, “In 2022-23, 80 lakh houses will be completed for the identified eligible beneficiaries of the PM Awas Yojana, both rural and urban. Rs 48,000 crore is allocated for this purpose. The central government will work with states for reduction of time required for all land and construction-related approvals, for promoting affordable housing for the middle class and the economically weaker sections in urban areas. We shall also work with the financial sector regulators, to expand access to capital along with reduction in cost of intermediation.”
With an aim of “Housing for All” by March 2022, the FM announced the completion of 80 lakh houses for registered beneficiaries under the scheme in 2022-23. So, a total fund of Rs. 48,000 crore has been allocated by the government with 60,000 houses for additional beneficiaries in rural and urban areas. The central government will work closely with the state governments to complete land and construction-related approvals in less time to promote affordable housing for economically weaker sections (EWS) and middle-income groups.
Home Loans Benefits
There are numerous tax incentives for the homebuyers in addition to the interest deductions on home loans in India to exemptions on the reinvestment of the proceeds from a sale of assets into a new house. But the homebuyers stuck with incomplete projects expressed discontentment on the absence of additional tax deductions on interest on home loans.
Quicker Green Clearances
The Union Budget 2022 has now addressed the problem of clearances that led to the delay in housing projects for any time period. “Parivesh”, a website for green approvals launched in 2018, has now expanded its scope and usage for homes that await green clearances. Now homebuyers will not face any delays in housing projects, thanks to green clearances.
Residential Localities along Roadways
With more attention given to the development of expressways and highways in the Union Budget, there will be massive residential development to be witnessed along them. The “PM Gati Shakti” scheme getting a boost, such areas will attract more developers and homebuyers in the future.
TDS Application for Homebuyers
The Finance Minister proposed that the homebuyer should deduct TDS (Tax Deducted at Source) at 1% in the Union Budget 2022-23. The TDS deducted will be – the stamp duty charges or the amount paid to the seller, the higher one. This regulation is not applicable to immovable and non-agricultural property which has the selling value of stamp duty charges above Rs. 50 lakh.
Section 80 EEA Extension for Homebuyers
The first-time homebuyers who have recently purchased house properties with value up to Rs. 45 lakh can claim additional tax deductions of Rs. 1.5 lakh annually over and above the rebate of Rs. 2 lakh claimed under Section 24. The scope of Section 80EEA is further extended up to 31 March, 2022.
The Ending NoteBudget 2022 slewed several incentives for the homebuyers that may lead to increase in the home prices. The multi-fold and steady rise in the prices of inputs or raw materials used in the home construction could add more to the increase of property prices.
Apart from the above listed benefits, there were several major missing for the homebuyer community such as:
- Though the Union Budget 2022-23 gave more attention to the PMAY scheme, the homebuyer fraternity would have benefited immensely from the increase in the Credit Linked Subsidy Scheme (CLSS). This showed that the government was keener to build affordable housing stock, but it would be more beneficial if there was an expansion of the CLSS scheme.
- Homebuyers expected an upward revision of tax deductions on home loans and there were no such policies reflected in the budget.
No matter homebuyers anticipated relaxations and reliefs from the government, but a major push to affordable housing for the people without considering such revisions has left them in dismay leaving major loopholes in the housing sector.
