Highlights of Union Budget 2016-17
22 Mar 2016
The Union Budget of India or the Annual financial statement is a comprehensive display of the Government's estimated revenue and expenditure for that particular year. It also includes estimates for the next fiscal year, known as budgeted estimates. The fiscal year runs from April 01 to March 31.
The latest Union Budget has brought some relief to the much aggrieved real estate sector. Finance Minister Arun Jaitley presented the budget, which catered to farmers, small taxpayers and underprivileged people of the society.
The minister stated that his budget stood on nine pillars. The pillars which would have the maximum impact on the real estate sector are infrastructure and tax reforms. Infrastructure was given a high priority in the budget. This spells good news because the growth of the real estate industry depends on quality infrastructure. There have not been any changes in the tax slab; however, small taxpayers have been granted an increase in rebate.
Here is a detailed look on the highlights of union budget regarding the realty sector.
- Those having an annual income of less than INR 5 lakhs, will see an increase in rebate from INR 2000 to INR 5000
- First time home buyers will get an additional deduction of Rs.50,000 on interest for loans upto Rs.35 lakh, provided the house value does not exceed Rs.50 lakh
- 100% deduction for profits to an undertaking from a housing project for flats upto 30 sq. metres in four metro cities and 60 sq. metres in other cities, approved during June 2016 to March 2019
- Service tax exempted on affordable homes that measure less than 60 sq. m.
- Dividend Distribution Tax on Real Estate Investment Trusts (REITs) has been removed
- Excise duty exemption on Ready Mix Concrete will bring down the cost for housing construction and in turn, encourage builders to pass on the benefits to home buyers
- Many road projects which were abandoned are to be revived
- 10,000 km of National Highways are to come up in 2017
- 50,000 km of State Highways are to be converted to National Highways
- Total outlay of Rs.2.18 lakh crore for rail and road, and Rs.2,21,246 lakh crore for infrastructure
- 160 airports and airstrips are to be revived
So, overall, the union budget 2016 was of great importance as it brought many positives for the real estate sector and will spur the market and encourage home buyers. Also, the nine pillars including tax reforms and infrastructure growth will promote ease of doing business and ensure fiscal discipline, thereby transforming India.