What Are The Benefits Provided To Real Estate In Union Budget 2021?

The Union Budget 2021 is expected to provide relief to the real estate sector and the government puts strong preference for the “Housing For All” and affordable homes scheme. The Finance Minister Nirmala Sitharaman has presented the budget post-Covid-19 pandemic. The Ministry of Housing and Urban Affairs has allocated Rs 54,581 Crore in the budget of 2021.
So, here are some points of benefits provided to the Real estate Industry in Union Budget 2021.

Affordable Housing

The earlier budget presented in July 2019, the Government provided relief and reduction in interest rates of Rs 1.5 Lakhs for the people who took a loan to buy an affordable house.

Finance Minister projected the availability and eligibility of this deduction of Rs 1.5 Lakh for the next one more year till March 31^st, 2022. Therefore, the borrowers who will take loan till 31^st March 2022 for an affordable home purchase can avail of this benefit.

Additionally, to keep the pace with the demand and supply of affordable houses, Nirmala Sitharaman has gifted a relief for the affordable housing projects and can avail a tax holiday for one more year – till March 31, 2022.

Increase In Safe Harbor Limit

For benefitting and incentivizing the homebuyers, if the actual transaction value is below the circle rate by up to 20% then they do not need to pay additional tax. AS the safe harbour limit is 20%, which earlier was just 10% for the specified primary sale of residential units.

Real Estate Investment Trust (REIT)

REITs are debt-financed by Foreign Portfolio Investors where the suitable and relevant amendments will take place and provide access to finance easily. It will supplement funds for infrastructure and real estate sectors.

Now, FM proposed to exempt TDS from the dividend payment to REIT/ InvIT and along with this, the advance tax liability on dividend income shall arise only after the declaration/payment of dividend. It will surely increase the demand and augment the real estate infrastructure.

Infrastructure

The operational metro has a total stretch of 702 km and another cast line of line covering almost 1,016 km. The Regional Rapid Transit System is getting constructing in 27 cities. MetroLite and MetroNeo are two helpful technologies that will be used for much cost-effective metro construction.
Funding to be Provided are:

• Rs 1,957.05 crore for Kochi Metro Railway Phase-II of 11.5 km.
• Rs 63,246 crore for Chennai Metro Railway Phase-II of 118.9 km.
• Rs 14,788 crore for Bengaluru Metro Railway Project Phase 2A and 2B of 58.19 km.
• Rs 5,976 crore and Rs 2,092 crore respectively for Nagpur Metro Rail Project Phase-II and Nashik Metro.

Faster Debt Resolution

The National Company Law Tribunal framework will now be stronger and able to resolve the cases faster and judiciously. The e-courts system shall be implemented and alternate methods of debt resolution with a special agenda for MSMEs shall be initiated.  

LED Lights

The LED Lights, fixtures and lamps will now pay more custom duty as it increased from 7.5% to 10% and on solar lanterns or solar lamps from 5% to 15%.

Construction workers

To formulate better condition of health, housing, insurance, food for the migrant workers, FM has extended her support and efforts and a portal will be launched. It will collect relevant information on engagement, building, and construction-workers among others.