The Union Budget 2024-25 announcement presents a variety of outcomes, both positive and negative. While there is a strong focus on infrastructure, connectivity, employment, and individual taxes, the real estate sector may feel neglected due to the absence of anticipated reforms and incentives. Explore further to discover the key highlights and drawbacks of the Union Budget 2024.
The Union Budget 2024-25 acknowledges the challenges faced by different sectors. However, there are limited measures directly benefiting the real estate industry. Nevertheless, the proposed infrastructure projects and emphasis on the Pradhan Mantri Awas Yojana (PMAY) are expected to have a positive impact on the residential and commercial segments.
Key Points from the Union Budget 2024:
- Income Tax Slab Revisions: The Finance Minister, Nirmala Sitharaman, introduced tax exemptions for individual taxpayers opting for the New Tax Regime, aiming to boost consumer spending and stimulate economic growth. Notable changes include an increase in standard deduction to Rs 75,000 and a revision in family pension deductions.
- PMAY 2.0: The budget allocates resources to construct an additional 3 crore homes under PMAY 2.0, emphasizing affordable housing initiatives to support both rural and urban areas. Additionally, PMAY Urban aims to cater to the housing needs of 1 crore urban poor and middle-class families through central assistance.
- Stamp Duty Reduction: FM Sitharaman recommended State governments to lower stamp duty rates, particularly for properties bought by women, to facilitate home purchases.
- Land Reforms: The government is focusing on land-related reforms in both rural and urban regions, which include digitizing land records through GIS Mapping for efficient property management.
- Rental Housing: The budget proposes dormitory-style accommodations for industrial workers in rental housing under Public Private Partnership (PPP) mode with VGF Support, addressing urban housing challenges strategically.
- PM Surya Ghar Muft Bijli Yojana: A notable scheme plans to install rooftop solar panels to provide free electricity to one crore households, promoting sustainable energy solutions.
Challenges Identified in the Union Budget 2024:
- The absence of anticipated measures such as GST reduction on construction materials and GST rebate on rental income.
- Disappointment among homeowners due to unaddressed expectations, including the distinction between principal and interest repayment slabs for home loans.
- The real estate sector’s long-standing request for ‘Industry’ status remains unmet, hindering equity investment and access to lower-interest loans.
While the budget focuses on crucial areas like transport infrastructure, there are areas that could receive more attention, including addressing inflation for mid-segment homebuyers, streamlining affordable housing definitions, providing tax relaxations on home loans, and granting industry status to the real estate sector.
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