Col. RS (Pickles) Sodhi, MD of Alpha G:Corp, gives his response to the latest budget.

Overview of proposed budget plans:

• Cheaper housing loan & Tax incentive for low income group
• Insurance sector FDI to be hiked to 49% from 26%, more attractive schemes likely
• Introduction of standardised KYC norms across financial sector
• Introduction of single demat account for all types of financial transactions
• PPF limit raised from 1 to 1.5 lakhs
• Special Small Saving Scheme to encourage savings for education & marriage of girl child.
• Income tax exemption limit increased from 2 to 2.5 lakh for below 60 yrs age
• Senior citizen exemption limit increased from 2.5 to 3 lakh
• Standard deduction limit u/s 80C raised from 1 to 1.5 lakh
• Exemptible interest on housing loan for self-occupied property increased from 1.5 to 2 lakh
• Long term Capital Gain on sale of debt mutual fund exemption limit increased to 20%
• Holding period for long term capital gain for mutual funds & shares increased from 12 to 36 months
• Reduction of the minimum built-up area and capitalisation for FDI in Real Estate with a 3 year post completion lock-in
• Introduction of Real Estate Investment Trusts (REITs) and Infrastructure Investments Trusts (InvITs) with necessary incentives and tax efficient pass through status
• Allocation of fund for development of 100 ‘Smart Cities’
• Sizeable budgetary allocation for affordable housing through NHB
• Impetus to Urban Infrastructure, Housing and Highway connectivity

Col. RS (Pickles) Sodhi MD-Alpha G:Corp

This maiden budget by the new government had to be cautious due to the present state of the economy, especially the alarming fiscal deficit. The FM while being prudent, has displayed a positive vision in the long-term, by addressing the concerns of all core and crucial sectors like, infrastructure, banking, insurance, agriculture, education and housing among others. Where real estate is concerned, he has announced an initial Rs.4000 crore towards the mission to incentivise the development of low cost housing in urban areas. There will be a marginal increase in property demand due to the higher tax deduction benefit on interest payment, which will prove a boon for existing home loans. The FM also proposed providing necessary incentives for REITs to cut pressure on existing bank lending rates. The proposed measures to encourage smart cities and slum development to be included in Corporate Social Responsibility, will have a far reaching impact if implemented judiciously. However, the much-awaited industry or infrastructure status to the real estate sector has been ignored once again. Had the FM taken the initiative in this regard, real estate, which is the second largest generator of employment in the country would have got the required shot in the arm, with better loan structuring and interest rates.