#UnionBudget2016: Jaitley's Bet On Affordability To Push India's Real Estate Market

One of the criticisms against the previous year's Union Budget was that it did not have many proposals in favour of the real estate industry. This may be why in the Union Budget 2016-17, Finance Minister Arun Jaitley proposed many steps that would provide an impetus to the real estate sector. If you are a home buyer, real estate investor, developer or an ordinary citizen, there are policies announced in the Union Budget 2016-17 in Parliament today (February 29) that may have an impact on you:

• If your house is under 60 sq mt, it will be exempted from service tax. This will lower the tax burden on low and middle-income households. 

• There will be a 100 percentage deduction for profits for affordable housing units which are lower than 30 sq mt in non-metros and 60 sq mt in metros. 

• Real Estate Investment Trusts (REITs) are exempt from dividend distribution tax (DDT).

• There will be skill development reforms for employees in the construction sector. 

• There will be a levy of infrastructure and agriculture cess. 

• If the cost of your house is less than Rs 50 lakh, for a housing loan up to Rs 35 lakh, you will receive a tax exemption of up to Rs 50,000, if you are a first time home buyer.

• If your income is lower than Rs 5,00,000, you will receive a deduction of Rs 5,000, instead of the previous year's deduction of Rs 2,000.

• Housing rent allowance deduction is raised from Rs 24,000 to Rs 60,000. 

• The government will spend Rs 25,000 on the recapitalisation of public sector banks. There will be amendments to help asset reconstruction companies to manage non-performing assets of public sector banks. 

• For the year 2016-17, the total outlay for infrastructure is Rs 2,21,246 crore. 

• The government will allocate Rs 3,000 crore per year in nuclear power. 

• Plans to revive 160 unused or under-utilised airports and airstrips at the cost of Rs 150 crore each. 

• To enable entrepreneurship in the road transports sector, Motor Vehicles Act will be amended.

• The amount allocated for roads is Rs 97,000 crore. The total outlay for such projects is Rs 2,80,000 crore. 

• The government will build 10,000 kms of highways in the financial year 2016-17. The government will also convert 50,000 kms state highways into national highways. 

• The government will allocate Rs 87,769 crore for the rural sector. 

• The Budget proposes Rs 9,000-crore allocation for the Swaccha Bharat Abhiyaan.