The budget allocated a sum of Rs 48,000 crore for the PM Awas Yojna. In urban and rural areas, 80 lakh houses will be constructed for identified beneficiaries for affordable housing under the PM Awas Yojana and 60,000 houses will be identified as beneficiaries.

Additionally, Rs 60,000 crore was allocated under the Har Ghar Nal programme to extend the coverage to villages on the northern border, Finance Minister Nirmala Sitharaman said.

A high-level committee under planners and economists will also be set up for urban capacity building, governance, planning implementation, and sustainable urban development for India @100, the finance minister said in her budget speech.

What were the expectations?

Real estate developers were seeking relaxation of long-term capital gains tax on real estate, a higher ceiling of home loan interest deduction for a tax rebate from Rs 2 lakh to Rs 5 lakh, redefined affordable housing, GST waiver or reduction on raw materials, and new provisioning for rental housing in the upcoming budget.

Real estate developers wanted the government to amend Section 80C of the Income Tax Act to increase the ceiling for repayment of housing loan principal, reported Economic Times.

According to real estate developers, homebuyers will benefit from an extension of the Credit-Linked Subsidy Scheme under the Pradhan Mantri Awas Yojana for middle-income groups till December 31, 2022.

To stimulate the property market in non-metro cities, the government was expected to consider raising the house value limit to Rs 75 lakh. Developers had proposed raising the cap in metro cities to Rs 1.5 crore from the present maximum of Rs 45 lakh.

Previous Budget

In Budget 2021, the government increased the supply of affordable houses and extension of the eligibility of the period for claiming tax holiday for an affordable housing project by one more year to March 31, 2022, under Section 80 IAC of the Income Tax Act, 1960. It announced an additional interest deduction of Rs 1.5 lakh under Section 80 EEA for affordable housing. It allowed debt financing to InVITs and REITs by foreign portfolio investors to further ease access to finance to InVITs and REITs, and to attract funds for the infrastructure and real estate sectors.