Budget Impact on Real Estate              

Budget Impact on Real Estate                  (updated - 08 July 2009)
The real estate sector looked up to to the budget with great hope for measures to resurrect the housing demand. It had asked for increase in 80C benefit to Rs 3 lakh and of which 2 lakh exclusively for principal repayment, extension of 100% deduction of interest on payment for owner occupied house as well like rented house, extension of sunset clause u/s 10A and 10B, etc.

While the extension of 10A and 10B benefits were granted for one more year, auguring well for commercial real estate -- especially, STPI space -- with no major change in tax benefits for investment in real estate sector, the budget has not done any thing concrete to resurrect the demand for the realty sector.

However, removal of surcharge for income up to Rs 10 lakh (Rs 1 million), increase in tax exemption by Rs 15,000 for senior citizens and by Rs 10,000 for women and other assesses will improve disposable income. 

But this will largely be inadequate considering the current property prices in urban centers and interest rates and will hardly be any incentive for pushing up demand for real estate sector.

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