In line with the Government’s aim to provide housing for all by 2022, a dedicated affordable housing fund will be set up under National Housing Board (NHB) that will ensure there are 37 lakh houses built in urban areas by end of 2018-19.
Union Finance Minister Arun Jaitley on Thursday announced that the Centre will create a dedicated affordable housing fund in the National Housing Bank. His announcements for developing better connectivity through air, road and rail are expected to give an impetus to the real estate sector.
The 2017 budget had proposed to assign infrastructure status to affordable housing projects and facilitate higher investments.
With the objective of boosting the supply of rural housing and augmenting the supply of affordable housing in urban areas, Jaitley said that 3.7 million homes will be built in urban areas in 2018-19 and 5.1 million homes in rural areas.
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. This would minimize hardship in real estate transactions.
“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.
The government has already reduced Goods & Services Tax burden of homebuyers in affordable housing category by 4% reduction to 8% with effect from January 25. This reduction in tax is applicable to up to 645-sq-ft homes purchased by availing the Credit linked Subsidy Scheme (ClSS) under the Prime Minister Awas Yojana (PMAY), as per the changes recommended at a recent GST Council meeting.