THE NEW EXEMPTIONS ON AFFORDABLE HOUSING
The Government has announced some progressive initiatives to boost affordable housing and has offered lucrative tax concessions to benefit home buyers.
BY DEO SHANKAR TRIPATHI, MANAGING DIRECTO & CEO, AADHAR HOUSING FINANCE
Reducing the GST rate from 8 % to 1% for the under construction properties in affordable housing with effect from 1st April 19.
The move will encourage buyers to book under construction properties, which will improve cash flow of developers. Earlier the buyers used to prefer ready to move in properties to save on GST.
Increasing the maximum carpet area on affordable housing to 60 sq. m in metros and 90 sq m. in non-metros.
This can enable the affordable housing buyers, particularly in non-metros, to buy a bigger house within their eligibility.
Tax concession on additional deduction of INR 1.50 lakhs on interest amount paid on housing loan sanctioned up to March 2020 for the property value up to 45 lakhs.
This is in addition to the existing INR 2 lakhs interest deduction from annual income. Thus, tax exemption will be available up to interest amount of 3.50 lac on home loan. Total tax saving of 7 lacs is expected on a 15 years loan.
The government has announced the much needed liquidity support to the sector. This will help the HFCs to get some liquidity and start funding to the home buyers.
FURTHERING AFFORDABLE HOUSING
To the affordable housing builders, the government has extended the income tax exemption for the projects which are going to be launched up to March, 2020.
• Provision of additional 1.95 lac crore houses to beneficiaries in rural areas under second phase of Pradhan Mantri Housing Yojna during 2020 to 2022.
• Allocation of 19000 cr as against 15500 cr under PMAY for credit link subsidy to home buyers from EWS/LIG/MIG category.