Amidst increased anticipation and scrutiny, Finance Minister Nirmala Sitharaman presented the third union budget of her tenure today, making it the first budget proposal to be made in the after-effects of the crippling COVID 19 pandemic. Experts and industry stakeholders alike, expected strong measures to boost the economy and positive policy reforms, in a bid to combat the instability and uncertainty that had gripped the nation and its people.

The realty sector, in particular, is visibly battling rough waters and appears to regain its footing, slowly, albeit steadily. Through the course of the last year, the sector received relief measures in the form reduced home loan rates, stamp duty charges, and subsidized costs for developers to address the steep downward slump the sector experienced. While these have germinated nascent seeds of growth, the sector is still in dire need of bold developer and homebuyer friendly policies, designed to spike up demand.

With the motto of 'sabka saath, sabka vikaas, sabka vishwas' and with a firm adherence to the Prime Minister's 'atmanirbhar' principal, the Finance Minister began her speech on a bolstering note - detailing all the government aides and funds that were injected into keeping the nation's machinery afloat during the pandemic while remaining confident of the accelerating performance of the economy, this year. Leaving no room to question its efficacy, she listed out six important aspects as the pillars of this year's Union Budget - Health and Wellbeing, Infrastructure, Inclusive Development, Development of Human Capital, Research and Development, and Minimum Government with Maximum Governance.

The Finance Minister concluded her speech at 1pm, and her budget was met with positive responses, if not jubilant ones. It is being hailed for it 'no surprises' approach and for its focus on reimposing a sense of stability in the economy. The budget heavily allocated funds towards the healthcare sector, infrastructure and affordable housing amongst other things, keeping the personal income tax slabs largely untouched and unperturbed - another move that was received warmly, amidst fears of a COVID cess being imposed.

Shifting our focus back to the housing sector, the Union Budget retains its focus on nurturing the country's affordable housing sector that falls under the Prime Minister's pet scheme - the Pradhan Mantri Awas Yojana. The Ministry of Housing and Urban Affairs has been granted Rs. 54,581 crores in this budget edition.

Here's a look at how the housing sector and the individual homebuyer fared in the Union Budget of 2021.

TAX HOLIDAY FOR AFFORDABLE HOUSING PROJECTS

In the Finance Minister's 2021-2022 Union Budget, affordable housing continues to merit a lion's share of the government's continual efforts and attention. The tax holiday that offered to affordable housing projects in the preceding Union Budget, was supposed to lapse on March 31st, 2021. However, Nirmala Sitharaman announced that the exemptions would be extended for another year, till 31st March 2022 in the hopes of redirecting funds back into the sector to boost construction and supply.

Under this, developers can avail up to 100% tax deduction on the profits earned from affordable housing projects. This also acts as an incentive to attract more real estate developers to take part in affordable housing, in a bid to propel the PMAY initiative further.

CONTINUED DEDUCTION OF INTEREST FOR HOMEBUYERS

Announced in the Union Budget of 2019, the government allowed an additional deduction of interest, amounting to Rs. 1.5 lakhs, for a loan taken to purchase an affordable housing unit, valued up to Rs 45 lakhs. This deduction is over and above the Rs. 2 lakh deduction allowed under section 24(b).

Further incentivising the sale of affordable houses, the Finance Minister announced an extension of this eligibility by another year, now making its deadline on the 31st of March, 2022.

BOOST TO RENTAL HOUSING

In a welcome move to resuscitate the rental housing sector, the Union Budget also purposes to allow tax exemptions for notified affordable housing projects. The Finance Minister added that the move was architectured for convenience of migrant labourers, who suffered vast economic losses in the heart of the pandemic.

BIG FUNDING TO INFRASTRUCTURE

Having improved infrastructure will only heighten the production and supply of the realty sector, by making roadways and transport easy access and hasslefree - for both developers, urban and rural homebuyers. The Finance minister has also announced an increase in funds allocation, directed towards Rural Infrastructure, taking it from Rs 30,000 crores to Rs 40,000 crores, in this edition of the budget.

In addition to this, more Tier 2 and 1 cities will boast of functional metro lines, making commute within the cities easier, amongst other important infrastructural undertakings.

Better infrastructure is directly beneficial to homebuyers and housing developers, alike as it generates more employment and the standard of living within the country.