From the extension of Pradhan Mantri Awas Yojana (PMAY) with an investment of Rs 10 lakh crore in next five years and removal of indexation benefit for the sale of property to setting up of 'plug and play' industrial parks, the Union Budget 2024 announced a slew of measures for the real estate sector.
Experts said that expansion of the PMAY scheme is a crucial step towards rejuvenating the affordable housing sector and cater to the housing needs of poor and middle-class of the country.
Here are key take aways for real estate sector from the budget:
PMAY 2.0
Presenting the Union budget 2024 finance minister Nirmala Sitharaman, announced that Rs 10 lakh crore will be invested in the flagship PMAY scheme including a central assistance of Rs 2.2 lakh crore over next five years.
"Under the PM Awas Yojana Urban 2.0, housing needs of 1 crore urban poor and middle-class families will be addressed with an investment of Rs 10 lakh crore. This will include the central assistance of Rs 2.2 lakh crore in the next 5 years. A provision of interest subsidy to facilitate loans at affordable rates is also envisaged," Sitharaman said in her budget speech on July 23.
She also mentioned about the decision of the first meeting of the third Union Cabinet chaired by Prime Minister Narfendra Modi and said that under PMAY construction of 3 crore additonal houses will be facilitated. Out which 2 crore will come in rural areas under PMAY (Grameen).
Removal of indexation benefit
Finance Minister Nirmala Sitharaman announced the removal of the indexation benefits for the sale of property in the Union Budget, and also reduced the rate of long-term capital gains (LTCG) tax on property sales to 12.5 percent, from the existing 20 percent.
Owing to the removal of indexation, property sellers will not be able to inflate the purchase price of the property by tying it to the cost inflation index, or CII, issued by the Income Tax Department, which reduces the earnings on the sale of the property and thus resulting in lower tax outgo.
Plug and Play industrial parks
Sitharaman said that the government will facilitate development of investment-ready 'plug and play' industrial parks with complete infrastructure in or near 100 cities, in partnership with the states and private sector, by better using town planning schemes.
She said that 12 industrial parks under the National Industrial Corridor Development Programme also will be sanctioned.
Rental Housing
The budget also gave push to rental housing as the FM announced that rental housing with dormitory type accommodation for industrial workers will be facilitated in PPP mode with VGF support and commitment from anchor industries.
TOD developemnt of cities
The union budget underlined that Transit Oriented Development (TOD) plans for 14 large cities with a population above 30 lakh will be formulated.
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