India is currently grappling with several economic challenges. The rupee’s decline against the dollar and reduced consumption levels have impacted economic growth. In this context, the real estate sector has urged the government to prioritize its development, highlighting its potential to boost the country’s economic growth. With Finance Minister Nirmala Sitharaman set to present the Union Budget on February 1, 2025, the sector has outlined several key expectations.
Real Estate Sector’s Expectations from Budget 2025
Speaking to CNBC TV18, NAREDCO National President G. Hari Babu emphasized the need for greater government support for the real estate sector. He suggested increasing the price cap for affordable housing from ₹45 lakh to ₹60 lakh, making it more inclusive for a larger segment of buyers.
Promoting Property Investments
Hari Babu highlighted that while real estate prices have remained stagnant for over a decade, construction costs and inflation have risen significantly. To encourage investments in property, he proposed increasing the tax exemption limit on home loan interest from ₹2 lakh to ₹5 lakh under Section 80C of the Income Tax Act, 1961.
He also called for the reintroduction of Section 80IBA, which provided tax incentives for affordable housing projects, and the removal of the Minimum Alternate Tax (MAT) provision. These measures, he stated, would align with the government’s “Housing for All” mission.
Additional Measures to Boost the Sector
G. Hari Babu further recommended that buyers should receive interest rebates under the Pradhan Mantri Awas Yojana (PMAY) for loans up to ₹6 lakh. He also suggested a 5% interest rate for loans up to ₹25 lakh to make housing more affordable.
Additionally, he urged the government to remove the ₹10 crore cap on capital gains deductions to encourage higher investments in the real estate sector.
The Path Forward
As the nation looks forward to the Union Budget 2025, these demands from the real estate sector underscore its importance in driving economic growth and addressing housing needs. Industry stakeholders are hopeful that the government will implement policies to provide the necessary stimulus to this critical sector.
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