Budget 2018: Focus on affordable housing; developers upbeat

To fast-track the government’s ‘Housing for All’ scheme, the Union Budget on Thursday proposed to set up an affordable housing fund under the National Housing Bank (NHB).

Published: 02nd February 2018 02:21 AM  |   Last Updated: 02nd February 2018 07:09 AM   |  A+A-

PM Awas Yojana, housing, home, scheme, graphic

Image for representational purpose only.

By Express News Service

NEW DELHI: To fast-track the government’s ‘Housing for All’ scheme, the Union Budget on Thursday proposed to set up an affordable housing fund under the National Housing Bank (NHB).

Union Finance Minister Arun Jaitley said that 3.7 million houses will be built in urban areas in 2018-19 and 5.1 million in rural areas. “My government will also establish a dedicated affordable housing fund in the National Housing Bank funded from the priority sector, lending shortfall and fully-serviced bond authorised by the government of India,” Jaitley said on Thursday.

The finance minister also proposed that no adjustment shall be made in respect of transactions in immovable property, where the circle rate value does not exceed 5% of the consideration.

“Currently, while taxing income from capital gains, business profits and other sources in respect of transactions in immovable property, the consideration or circle rate value, whichever is higher, is adopted and the difference is counted as income both in the hands of the purchaser and seller. Sometimes, this variation can occur in respect of different properties in the same area because of a variety of factors, including shape of the plot and location,” Jaitley said.

However, the real estate sector did not appear too enthusiastic about the announcements.

“The budget is focused on agriculture, education and rural economy, emphasising on rural infrastructure, roads and job creation for rural people. However, other aspects seem positive, and we hope that this will lead to accelerated economic growth leading to growth in the real estate sector. There are indirect benefits through major announcement in infrastructure but lack any direct benefit for the real estate vertical,” said Gautam Kalani, Director, Corporate Finance, real estate developer Lotus Greens India.

Current scenario

Currently, while taxing income from capital gains, business profits and other sources in respect of transactions in immovable property, the consideration or circle rate value, whichever is higher, is adopted and the difference is counted as income both in the hands of the purchaser and seller

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