Budget 2024: Transforming Measures for Housing in India

The Union Budget 2024 is a step towards improving the Indian housing sector, especially for first-time homebuyers and middle-class families. The government, consistent with its commitment to promoting affordable housing, has introduced several schemes and deductions under the Income-tax Act of 1961. These initiatives aim to reduce the income tax burden on first-time home buyers.

Read on to discover the ways in which the new budget for 2024 supports affordable housing and what developments to expect for the real estate business.

Pradhan Mantri Awas Yojana: Housing for All

As per the old 2016 Budget, you can get a maximum deduction of Rs 50,000 on home loan interest under Section 80EE on top of the deduction in Section 24. In the 2019 Budget, a new deduction under Section 80 EEA was introduced for affordable housing, allowing an additional Rs 1.5 lakh on housing loan interest, with some conditions. Apart from these tax deductions, the Budget 2024 launched the PMAY scheme as part of the 'Housing for All' campaign.

The scheme offered a specific subsidy on home loan interest, providing up to Rs 2.67 lakh to different categories of home buyers. Those eligible for the scheme included the Economically Weaker Section (EWS)/Low Income Group (LIG), Middle Income Group I (MIG-I), and Middle Income Group II (MIG-II).

Housing Scheme for Middle-Class Families

For the eligible middle-class population residing in rented accommodations or unauthorised colonies, the budget also focuses on aiding these individuals and families in purchasing or constructing their own homes. The scheme aims to decrease the prevalence of unauthorised colonies and promote homeownership among the middle class.

Pradhan Mantri Awas Yojana (Gramin) for Female House Ownership

The Union budget 2024 aims to construct an additional two crore houses in rural India over the next five years through the Pradhan Mantri Awas Yojana (Gramin). In the PMAY-G, women can individually or jointly own more than 70% of the allotted houses, offering crucial social security for rural women. This initiative is to tackle the gender disparity in house ownership prevalent in India, where men own more homes than women across various age groups, locations, and income brackets.

Green Initiatives Through Solar-Powered Homes

The budget proposes to equip one crore homes with rooftop solar power facilities. Providing 300 units of free electricity to these homes will lower the financial burden on families.

Families have the opportunity to save 15,000-18,000 INR annually by selling excess solar power. It not only offers a financial incentive for adopting solar energy but also improves the country's energy security and sustainability.

Impact on the Real Estate Sector

The government's commitment to providing housing for economically weaker sections (EWS) and lower-income groups (LIG) is likely to increase demand for affordable homes and make the real estate market in India stronger. Moreover, the budget talks about improving infrastructure, especially in Tier 2 and Tier 3 cities.

The budget has set aside a significant amount for infrastructure, with an 11.1% increase from the previous year to over ₹11 lakh crore. As the real estate budget 2024 allocates more funds for infrastructure in cities and includes plans to expand Metro Rail and NaMo Bharat, investors can expect a significant transformation in urban areas.

The budget also acknowledges the potential of tourism, particularly in spiritual tourism, and urges states to develop renowned tourist spots. This focus will boost the hospitality and retail industries in tourist destinations, providing opportunities for real estate development in these areas.

The Final Word

With a dedicated focus on affordable housing, tax deductions, and innovative schemes like PMAY, the government is addressing the diverse needs of homebuyers. The commitment to gender equality in property ownership, green initiatives through solar-powered homes, and investments in infrastructure further contribute to an improved real estate market in India.