Union Budget 2010-11 has both positive and negative aspects for the real estate developers as well as the buyers. There is a revision in personal income tax slabs, which will strengthen the purchasing power of the buyers affecting the demand of the residential sector. The common man will also be benefited by the continued subsidy of one per cent for affordable housing loans, which will help this sector to grow. A one-time interim relief would be provided to the housing and real estate sector by allowing pending projects to be completed within a period of five years instead of four years for claiming a deduction on their profits.
On the other hand, a two per cent increase in excise duty of cement and steel might not prove profitable for the real estate developers as the cost of construction would be expensive which will ultimately result in the increased cost of the project and hence the buyers will be affected. Also, it would have been a great support to the real estate sector if Section 80I (B) would have been renewed to thrive the demand of affordable housing.
Union Budget 2010-11 is supportive for the tax payers as the extension of limit will help in reducing burden on individual tax payers. The budget tabled will induce renewed sense of optimism over the country's growth.
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