Budget Roundup: Affordable Housing Gets Infrastructure Status
The biggest news comes from affordable housing developers as Finance Minister Arun Jaitley announced that Affordable housing will be given infrastructure status. Apart from this, carpet area instead of the built up area of 30 and 60 sq mt will be counted in affordable housing. The 30 sq mt limit will apply only in case of municipal limits of 4 metropolitan cities. For the rest of the country, including in the peripheral areas of metros, limit of 60 sq mt. will apply.
Meanwhile, allocation for Pradhan Mantri Awas Yojana for rural areas has also been increased from Rs 15000 to Rs 23000 crore with a promise to complete 1,00,00,000 houses by 2019 for homeless and those living in kaccha houses.
Finance Minister Jaitley also announced a reduction in the holding period for computing long-term capital gains from transfer of immovable property from 3 years to 2 years. Also, the base year for indexation is proposed to be shifted from 1.4.1981 to 1.4.2001 for all classes of assets including immovable property. Meanwhile, capital gain tax exemption will be given for persons whose land is being pooled for the creation of the capital city of Andhra Pradesh under the Government scheme.
For builders for whom constructed buildings are stock-in-trade, tax on notional rental income will only apply after one year of the end of the year in which completion certificate is received
For easing FDI norms, Foreign Investment Promotion Board will be abolished in 2017-18 and further liberalisation of FDI policy is under consideration. FIPB offers a single window clearance for applications on Foreign Direct Investment (FDI) in India that are under the approval route. The sectors under automatic route do not require any prior approval from FIPB and are subject to only sectoral laws.