Predictions for the Union Budget 2017 by Varun Manian, Managing Director, Radiance Realty

CHENNAI, January 20, 2017 /PRNewswire/ --

Every year when the budget is read out, people from various professional sectors watch it in anticipation. Real estate builders, buyers, and investors also eagerly wait for this to unfold. The Union Budget 2017, like every year's budget, has already triggered many expectations and wish lists.

From clarity on GST to relaxation in income tax rate, there are many predictions made by real estate and financial experts about the Union Budget. 2017 will be the year for real estate as we can expect a lot of dark clouds to shed off. Also, even after 70 years of independence, India still has lakhs of people who do not have their own homes. With 'Pradhan Mantri Awas Yojana', we can expect that 'housing for all' scheme comes true in the next few years. Affordable housing segment already has an infrastructure status, which is fuelling its growth.

From affordable housing to luxury homes, from residential to commercial spaces, real estate sector has seen a lot of significant changes in the last decade. Post budget announcement, we can expect some more positive changes in the real estate sector in India. While we can know the complete details of the budget and its impact on real estate only on February 1, here are some predictions from our end.

Clarity on GST 

The goods and services tax (GST) structure was announced in 2016. However, the real estate sector is anticipating with bated breath about more clarity on the same. While GST seems to be positive for real estate, it is still unclear which tax rates will be applied when it comes to the construction industry.

One definite prediction that can be made regarding Union Budget and Real Estate for 2017 is that the GST law will get implemented this year, most likely by Jul 2017. Speaking of service tax, it is expected that the budget this year also brings the much-awaited clarification on the abatement scheme.

Increase in Income Tax Incentives for First-time Home Buyers 

One of the biggest things in the mind of every potential first-time home buyer is, "Will the 2017 budget bring in some additional income tax incentives for us?" Only the actual budget can throw more light on this. However, it is predicted that government might increase the income tax incentives for the first home buyers to reach the objective of 'Housing for All by 2022.'

If the government brings across this increase in tax incentives, affordably-priced real estate projects, especially in metros, will boom. Most India cities lack institutionalised rental housing, and a move that benefits first-time home buyers in taxation will not only make more people buy their own homes but will also encourage more builders to come up with affordable housing projects.

Increased Tax Saving on Housing Loan 

One of the other things that is predicted about the budget is that the government might increase the tax deduction limit in case of housing loans. The current tax deduction limit is INR 200,000. This is quite insignificant, especially for home buyers in Metro cities. With property prices appreciating, at least home buyers in cities like Chennai, Mumbai, Bangalore, NCR etc. should have increased tax savings on housing loans, thereby bringing down the overall cost of buying a home. Furthermore, it would be beneficial if tax concessions on house insurance premiums get introduced in this year's budget. This would encourage every homeowner to insure their homes.

Increase in House Rent Deduction Limit for Entrepreneurs and Self-employed 

If you are someone who earns a monthly salary, you would know that you would get house rent allowance (HRA) as a component in your salary. This amount can be used to claim a tax deduction. However, if you are self-employed, i.e. if you freelance or run your own business, the HRA claim can be made for only 24,000 INR. This is quite low. For salaried people, the HRA varies based on their overall salary. As their pay increases, their house rent allowance might also increase. To neutralise this across all professional sectors, the budget should address this anomaly.

Clarity on Definition of Beneficiaries Under Pradhan Mantri Awas Yojana (PMAY) 

As we all know the government recently announced the new interest rates under the Pradhan Mantri Awas Yojana, where loans up to 1,200,000 INR would have 3% interest and loans up to 900,000 would have 4% interest. We can say that two new income categories will be able to avail these high loans at this interest rate. However, there is no clarity yet on who will be beneficiaries under this scheme.

We expect that the Budget 2017 will throw some light on the same. This way, young urban professionals looking to buy their own apartments can enjoy these low-interest benefits despite not falling under Economically Weaker Section (EWS) or Low Income Group (LIG).  We must also wait for the budget to know whether loans taken for affordable housing in metro cities will also be granted similar benefits.

About Radiance Realty:
The Manian family is at the heart of Radiance Realty. In 1949 they established NAPC, a leading construction company in Chennai, India and the Middle East. In 2012, NAPC Properties evolved to become Radiance Realty Developers India Ltd. A combination of the energy and tenacity of youth and the solid dependability of the old, Radiance Realty is headed by Varun Manian . His focus and vision are what drive Radiance Realty to consistently push the bar in order to evolve into the best property developers in India. Built on the pillars of quality and integrity, Radiance Realty is the edifice that emphasises on delivering the highest possible standards to its customers. It develops residential real estate primarily across Chennai. It also has development across Dubai, Bangalore, Mumbai, Coimbatore and Conoor. The group now consists of Radiance Media Group, Radiance Facility force, Radiance Home Solutions and Radiance Total Care. Radiance Facility Force, a Facility Management company managing and maintaining buildings and workspaces. 

For more details please visit http://varunmanian.com/

Media Contact:
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