53% contribution of real estate to GDP; limit of increased deduction on principal-interest of home loans

New Delhi| To increase the supply of affordable houses, the government should reduce the income tax rate on affordable housing schemes to just 15 percent in Budget 2025 to be presented on February 1. Apart from this, attention should also be paid to increasing the limit of deduction on principal and interest paid on home loan.

Real Estate Developers Association of India (CREDAI) has given several suggestions for the upcoming budget to address the serious challenges faced by the sector. These suggestions also include changes in the definition of affordable housing and providing tax relief to real estate companies to build affordable houses.

CREDAI National President Boman Irani said, the real estate sector has always been at the forefront of nation building with its contribution to GDP, employment generation and infrastructure. Contributing about 53 per cent to the country’s GDP and employing more than eight crore people, the region holds the key to meeting the housing needs of the 40 crore Indians who do not own houses. If the government pays attention to the suggestions, it will not only boost GDP but will also empower home buyers and support the country’s economic ambitions. The government should also consider these suggestions with a view to providing seven crore houses and creating two crore new jobs in the next seven years.

Government should set expenditure target of Rs 11 lakh crore: ICRA
Rating agency ICRA believes that the government should target capital expenditure of Rs 11 lakh crore in the budget.
ICRA Chief Economist Aditi Nair said, the capital expenditure during April-November in the current financial year has been Rs 5.13 lakh crore, which is 46 per cent of the budget estimate of Rs 11.11 lakh crore. This means that in the remaining months of the current financial year, the government will have to spend 54 per cent.

Import duty may increase to stop the fall of rupee
DK Srivastava, chief policy advisor, EY, said higher duties on imports could be imposed in the budget to curb the fall in the value of the rupee in a few months. This will curb the demand for dollars among importers and help in stopping the falling value of the rupee. Srivastava said, the sudden fall in the rupee against the US dollar is going to be a challenge for budget makers on the fiscal side and RBI on the monetary side. The rupee has fallen nearly 3 percent since November.