The next budget is critical because it will be the first full-year budget of the Modi 3.0 government, and we expect big announcements to help the infrastructure and real estate sectors, which are important drivers of economic growth and support many related industries.
The rationalization of homebuyer taxes and charges, which in many states amount to more than 12% of a property’s worth, should be a primary area of concentration. Although the finance minister pushed state governments to address this issue in the last budget, there hasn’t been much movement. We hope that this budget contains measures to simplify these fees and give homebuyers much-needed respite. Furthermore, we implore the government to reexamine the real estate long-term capital gains (LTCG) tax and think about offering relief in this regard.
Furthermore, raising the tax deduction limit under Section 24(b) for home loan interest—currently capped at ₹2 lakh per year—to at least ₹5 lakh would provide significant financial relief, especially for homebuyers in metropolitan cities where high property prices necessitate large home loans. These steps toward GST reforms for the real estate sector are also required to make it a more appealing investment option. This move could increase demand and encourage homeownership.
The real estate industry’s introduction of industry status is another long-standing request. This would make it possible for developers to obtain funding at more favorable rates, lowering the cost of housing for purchasers.
Increasing funding for infrastructure development, such as last-mile connectivity initiatives, multimodal corridors, and metro networks, should also be a priority for the government. By boosting the expansion of commercial real estate in major cities and their surrounding areas, these investments will not only increase urban mobility but also promote economic activity and draw in investment.
Overall, a balanced budget strategy that rationalizes taxes, encourages homebuyers, and fortifies infrastructure would be essential to boosting the real estate and infrastructure industries and advancing the economy as a whole.
Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd.
“The real estate industry is hopeful about improvements that can boost operational efficiency and serve as growth catalysts as we get closer to the next budget. Homebuyers may benefit greatly from raising the present tax exemption limit on housing loans to ₹5 lakhs in order to reflect escalating real estate and building expenses. Millions of prospective homebuyers would benefit immediately from this action, which would also increase demand in the industry.
Giving real estate industry status would be as revolutionary and could revitalize more than 200 related industries. Such acknowledgment will strengthen the sector’s standing as a pillar of the Indian economy by promoting job creation, facilitating skill development, and increasing economic activity.
The real estate business is positioned to play a crucial role in India’s journey toward ‘Viksit Bharat 2047.’ Strategic improvements, such as revisions to GST input tax credit restrictions, might lessen developers’ tax costs, potentially stabilizing property prices and making housing more affordable. Furthermore, a ₹5 lakh subsidy for housing loans up to ₹1 crore would provide urban and semi-urban homebuyers with much-needed financial assistance.
Expanding the concept of affordable housing to encompass homes up to ₹1 crore would better reflect changing market conditions and support the government’s “housing-for-all” agenda. If put into effect, these changes have the potential to unleash enormous potential, driving the industry toward sustainable growth and making a substantial contribution to the country’s development objectives.”
