The much-anticipated Union Budget for 2025 will be unveiled by the Finance Minister on February 1. Homebuyers across the nation are eagerly awaiting announcements that could potentially benefit them significantly. With expectations of increased tax benefits on home loans and various incentives aimed at promoting affordable housing, the budget is seen as a crucial moment for the real estate sector. Given the stagnation in tax benefit norms for home loans, a proactive approach in this direction could not only aid buyers in fulfilling their dreams of home ownership but also invigorate the real estate market.
What is the Demand?
The National Real Estate Development Council (NAREDCO) has advocated for increasing the tax deduction limit on home loan interest payments from Rs. 2 lakh to Rs. 5 lakh. The organization emphasizes the need for government recognition of the housing sector as an infrastructure asset in the upcoming budget. In discussions with Finance Minister Nirmala Sitharaman, NAREDCO Chairman Niranjan Hiranandani highlighted the essential requirement to channel more investments into the affordable housing segment.
Key Suggestions from Industry Leaders
In addition to the demand for increased tax benefits, numerous suggestions have been put forth aimed at promoting urban development and infrastructure growth.
- Increased Tax Deductions: Presently set at Rs. 2 lakh under the Income Tax Act, this limit is deemed insufficient. A proposal to raise it to at least Rs. 5 lakh is viewed as a critical necessity.
- Promotion of Energy and Urban Infrastructure Development: Alongside housing, enhancements in energy and transportation infrastructure are vital for sustainable urban growth.
- Collaboration Among Industry Stakeholders: Leaders from various organizations, including GMR Group, FCONS Infrastructure Ltd., and Renew Group, stressed the importance of a united approach in advocating for these changes.
Potential Major Announcements
| Announcement | Possible Impact |
|---|---|
| Increased Tax Benefits on Home Loans | This initiative could significantly enhance the interest of the general public in purchasing homes, thereby boosting demand in the housing market. |
| Reintroduction of Credit-Linked Subsidy Scheme | Reviving this scheme would provide financial relief to first-time homebuyers, particularly those in Economically Weaker Sections (EWS), Low Income Groups (LIG), and Middle Income Groups (MIG). |
| Restart of Section 80EEA | This tax benefit allows first-time buyers to enjoy deductions, promoting affordability in housing during costly times. |
| Increase in Tax Deduction Limits | Restoration of extra deduction benefits for first-time homebuyers will provide substantial support and encouragement for potential buyers in a high-price environment. |
Conclusion
As the Union Budget of 2025 approaches, the focus on boosting homebuyers’ confidence is critical. With the real estate market currently healing post-pandemic, proactive measures in the budget could be a game-changer, ensuring accessibility and affordability in housing for all segments of society. By implementing these necessary changes, the government can not only foster growth in the real estate sector but also contribute to the overall economic development of the country.