Atmanirbhar 3.0: Key takeaways from Sitharaman's measures on income tax relief for homebuyers

Finance Minister Nirmala Sitharaman has given a Diwali gift to the people of India through a new stimulus package aimed at reviving the economy badly affected by coronavirus. Union Finance Minister Nirmala Sitharaman has announced the Atmanirbhar 3.0 stimulus measures to push economic growth. 

Sithatraman announced relaxations in income tax rules to allow the sale of primary residential units of up to Rs 2 crore value below the circle rate. In an effort to boost the residential real estate sector, the FM said the differential has now been increased to 20 percent for period up to June 30, 2021, for only primary sale of residential units of value up to Rs 2 crore.

"This measure will reduce hardships faced by both home-buyers and developers and help in clearing the unsold inventory," Sitharaman said.

Moreover, She announced an Rs 18,000 crore additional outlay for the urban housing scheme to help complete real estate projects that would create jobs and boost the economy, adding that the move would ould help start work on 12 lakh houses as well as complete 18 lakh houses.

She further said that it would also create 78 lakh new jobs as well as demand for steel and cement.  

She said the Rs 18,000 crore would be provided over and above the Budget Estimates for 2020-21 for Prime Minister Awas Yojana (Urban) through additional allocation and extra-budgetary resources.

Sitharaman laid down a total of 12 new measures to support the economy and industry, ranging from employment generation, collateral-free credit for stressed sectors to subsidised fertiliser for farmers.

Sitharaman announced the `Atmanirbhar Bharat Rozgar Yojana` to incentivise creation of new employment opportunities during the Covid-recovery phase.

The employment scheme effective from October 1 will be applicable to eligible new employees joining the EPFO-registered establishments and for those who exited these concerns during the Covid pandemic (March 1-September 30, 2020) and drawing monthly wages of less than Rs 15,000.

Under the scheme, the central government will subsidise the Employees` Provident Fund (EPF) contributions for two years.

The Centre will provide 12 percent of the contributions of both employers and the employee for establishments with up to 1,000 employees. In the case of establishments with over 1,000 employees, the Centre will only subsidise 12 percent of the employees` EPF contributions.

Also, in order to provide a further boost to rural employment, the government will provide an additional outlay of Rs 10,000 crore for the Pradhan Mantri Garib Kalyan Rozgar Yojana.

The government will provide Rs 65,000 crore to farmers to ensure adequate supply of fertilisers in the upcoming crop season.

In a major decision to support the pandemic-hit industry, the government has also announced an Emergency Credit Line Guarantee Scheme (ECLGS 2.0) for providing much needed relief to stressed sectors by helping entities sustain employment and meet liabilities.

(With IANS inputs)