The Union government's efforts to enhance supply of housing stock through initiatives like 'Housing for All by 2022' have been largely focused on the affordable segment; and this time around too, the segment comes in for a 'positive' treatment. Finance Minister Piyush Goyal, in his Interim Budget Speech, extended benefits under Section 80IBA of the Income Tax Act for one more year. This will enable creation of more homes under affordable housing. This will be applicable to housing projects approved till March 31, 2020, and it reinforces the perception that the government stresses on more incentives for the affordable housing segment to meet its aims of providing housing for all.

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For real estate in general and housing in particular, this is a positive Budget speech. For the economy, it focuses on the farm sector and the middle class. I would rate it as '9 out of 10', because the Minister has successfully worked out a balancing act. He has given tax breaks, enhanced benefits while not increasing taxes — and yet, has shown a roadmap that will keep fiscal deficit in control.

To provide an impetus to real estate, the Minister has proposed extending the period of exemption from levy of tax on notional rent on unsold inventories from one year to two years after the project is completed. This is a positive move. The real estate developer will be incentivised to construct more, and as more housing stock enters the market, it will impact price points of residential real estate while homebuyers will get a wider choice.

The Minister mentioned a proposal to exempt levy of income tax on notional rent on a second self-occupied house. This will positively impact not just families who have more than one house but also investors looking at buying a second house to give out on rent. Effectively, this will help enhance creation of rental housing stock, with obvious positives.

Another proposal is no tax on house rents up to Rs 2.4 lakh from the previous limit of Rs 1.8 lakh. This will also be positive for investors who will find it attractive to buy a second home to rent out.

The benefit of rollover of capital gains under Section 54 of the Income Tax Act has been proposed to be increased from investment in one residential house to two residential house for a tax payer having capital gains up to Rs 2 crore. This benefit can be availed once in a life time. The Minister gave the example of Mumbai, wherein a family sells a house in South Mumbai and buys two houses in suburban Mumbai, and the benefit of this was availed only on one of the new homes. Describing this as something that is becoming a norm across urban centres in India, the Minister said this would help families in a similar situation.

NAREDCO had submitted a representation with specific points that would benefit home seekers and the industry; it is satisfying that the representation was taken in the right spirit and we see some of those points reflected in the Interim Budget speech. The Minister also mentioned that there was an on-going effort to reduce GST burden on homebuyers; he spoke about formation of a Group of Ministers who are looking into this.

According to me, two things that could have also made it to this positive Interim Budget speech are granting of industry status to real estate as a sector and not restricting it only to the affordable segment. Also, the NBFC deadlock and stressed asset problems could have been dealt with in terms of solutions in the Interim Budget speech.

The one paradigm change in real estate — the new regulatory regime under RERA — came in for mention from the Minister. He said RERA has helped in bringing transparency in real estate sector, and I concur. The Minister mentioned in his speech that India is poised to become a $5 trillion economy in 5 years and aspires to become a $10 trillion economy in the next 8 years. This will obviously augur well for real estate and we look forward to positives in days to come.Niranjan Hiranandani, Co-Founder and MD, Hiranandani Group. His newest venture is Hiranandani Communities. He is President (Nation), National Real Estate Development Council (NAREDCO), which works under the aegis of Ministry of Housing & Urban Affairs, Government of India.