Housing, loans and benefits for income tax deductions are among the factors numerous persons particularly look forward to when the Union Budget is presented. As Finance Minister Nirmala Sitharaman presented the first Budget of the Modi 2.0 government, one such announcement for affordable housing stood out. An additional Rs 1.5 lakh deduction has been announced for home buyers, in addition to the earlier Rs 2 lakh, taking the overall deduction to Rs 3.5 lakh, for interest paid on loans taken till March 31, 2020. The benefit applies only to self-occupied homes valued up to Rs 45 lakh.
During her Budget speech in the Lok Sabha on Friday, Minister Sitharaman said, “For realisation of the goal of ‘Housing for All’ and affordable housing, a tax holiday has already been provided on the profits earned by developers of affordable housing. Also, interest paid on housing loans is allowed as a deduction to the extent of 2 lakh in respect of self occupied property. In order to provide a further impetus, I propose to allow an additional deduction of up to 1,50,000/- for interest paid on loans borrowed up to 31st March, 2020 for purchase of an affordable house valued up to 45 lakh. Therefore, a person purchasing an affordable house will now get an enhanced interest deduction up to 3.5 lakh. This will translate into a benefit of around 7 lakh to the middle class home-buyers over their loan period of 15 years.”
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Finance Minister Nirmala Sitharaman announced a slew of initiatives and measures to kick-start growth in the economy, including the intention to invest Rs 100 lakh crore towards infrastructure in the next 5 years, to buttress the transformation of India into a $5 trillion economy.
A ten-point vision plan was voiced to allow for this, including:
There was significant impetus for both startups, sunrise sectors as well as MSMEs, including the doing away of angel tax, an extention of the 25% tax rate slab for companies with up to Rs 400 crore turnover from the existing Rs 250 crore. An announcement towards further opening up FDI norms in various industries, as well as in streamlining of labour laws was also made.
There was plenty in there for individuals as well, particularly the assurance of housing, road connectivity, electricity and gas by 2022 as well as the empowering of the new Jal Shakti Ministry to accomplish the newly stated 'Har Ghar Jal' mission by 2024. Additionally, retailers and shop-owners will also be brought under the NPS pension scheme, while in a massive focus on education and research, 'Study in India' and 'National Research Foundation' were also announced.