Finance minister Nirmala Sitharaman on February 1 extended the affordable housing benefit by one more year until March 2022. The FM also announced tax exemption for rental housing projects in her Budget speech.
The income tax rebate of Rs 1.5 lakh for affordable home loans will continue until March 2022, she said.
In order to promote supply of Affordable Rental Housing for the migrant workers, it is also proposed to allow a new tax exemption for the notified Affordable Rental Housing Projects, she said.
The finance minister also said that the government is committed to provide affordable rental housing for migrant workers.
“With focus on affordable housing, Rs 1.5 lakh principal deduction for affordable housing has been extended till 31 March 2022. This is a welcome move to give a necessary push to housing for all initiative,” said Arpit Mehrotra, Managing Director, Office Services (South) at Colliers International India.
“As anticipated, affordable housing and rental housing got a big boost with the government extending the period for extra deduction of Rs 1.5 lakh available for loans up to 31st March 2022. This will keep demand buoyant for affordable housing in 2021 as well. Further, the extension of the tax holiday for affordable housing projects for one more year will help bring in more new supply within this segment,” said Anuj Puri, Chairman - ANAROCK Property Consultants.
As per ANAROCK Research, affordable housing already accounts for more than 35 percent of the supply across the top 7 cities in the country.
The Housing for All by 2022 initiative was launched by the Modi government within five months of assuming office. It’s all about ensuring a home for every Indian by 2022. To boost affordable housing and achieve the vision of Housing for all by 2022, the government (Central and State) have undertaken several initiatives, such as Pradhan Mantri Awas Yojana (PMAY) that aims to build 1 crore homes in urban and rural India by 2022.
Follow Moneycontrol's Budget 2021 live coverage here
Affordable housing has also been accorded infrastructure status, ensuring that developers in this segment have access to cheaper loans.
The Credit Linked Subsidy Scheme for the Middle Income Group (CLSS for MIG) was announced by Prime Minister Narendra Modi on December 31, 2016 and was earlier extended twice till March 2019. The government in the last week of December 2018 extended the interest subsidy scheme till March 2020 for first time urban home buyers who have annual income between Rs 6 lakh and Rs 18 lakh.
The Affordable Rental Housing Project scheme was announced by Finance Minister Nirmala Sitharaman as part of the Rs 20 lakh crore economic package to deal with the COVID-19 pandemic.