Hailing the 2024 Union Budget as “people-friendly” and “progressive”, Prime Minister Narendra Modi Tuesday said the Budget brings with it new energy and strength to India’s development trajectory, especially at a time when the country is fighting the pandemic. “This Budget brings more infrastructure, more investment, more growth and more jobs,” he said. The Prime Minister said that the youth of India see this Budget as one that will give wings to their ambitions, and added that the emphasis on futuristic technologies in all spheres is noteworthy and will benefit a cross-section of our citizens.
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PM Modi, however, said that he will be speaking about Budget 2023 in detail tomorrow. The Real Estate and residential housing sector for one has great hopes from this upcoming budget. The real estate sector of India has shown a lot of resilience in the past two years and with growth returning to pre-covid level slowly, the sector expects some special home loan benefits in the new budget 2023. While the government is taking significant measures to tackle and curb the virus effectively, the common man’s Wishlist also has benefits on home loans in budget 2023. Keeping that in mind, here are the new benefits on home loans in budget 2024 that are expected from the union government.
Speaking at a press conference after presenting the Union Budget, Finance Minister Nirmala Sitharaman said a conscious decision was taken not to increase taxes because of the hardship that people have been facing due to the pandemic. Sitharaman, while presenting the Union Budget, said that the country is expected to grow at 9.27 per cent in the coming year. With a focus on four pillars of development — inclusive development, productivity enhancement, energy transition and climate action — the Budget give a blueprint of the economy from India at 75 to India at 100, Sitharaman said.
More Housing Loan in Budget 2024
2020-21 was a good year for the real estate market despite the huge uncertainty caused by the pandemic. The whole scenario showed people the importance of a well-stacked house laced with all amenities. Despite this increase in the number of expected homeowners, buying a house in India is a distant dream for a major proportion of the country’s population. The high tax rates on home loans have resulted in India’s property market having exorbitant prices for even small houses with little to no amenities.
Read: BOB Home Loan Calculator – Understand your Home Loan Better
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As mentioned, buying a house has been a dream for many, yet it remains a significant challenge even when the government has reduced the interest rates on home loans to record lows. The economic uncertainty caused by the pandemic has left people expecting more slashes in home loan interest rates after budget. The general expectation from the government is new schemes, reforms and home loan benefits in the new budget.
The high-interest rates on home loans mean that home loans still remain an investment and a home loan interest rebate in budget 2023 would be very helpful for the homebuyers. This move will ensure that the homebuyers can save more on their monthly instalments.
The union government of India has been working significantly towards strengthening the real estate ecosystem in the country and providing affordable housing options for everyone. That is why the masses expect home loan benefits in the new budget. A home loan subsidy in budget 2023 would help keep to the expectations.
Expected Home Loan Tax Benefit in New Budget
A big factor will be trying to keep EMI’s affordable. The general population wants affordable housing where home loan EMI’s don’t cross 30% of the monthly income. Generally, the applicants are required to pay a down payment on the home loan amount. Saving up enough for a home loan down payment can be tough during these testing times and that is why the home loan budget 2023 highlights should include budget 2023 home loan subsidy. The continuation of the Credit Linked Subsidy Scheme (CLSS) with reduced home loan interest in budget 2023 would be very impactful in continuing the trend of attracting home buyers. The CLSS has scheme has tried to make housing affordable in different parts of the country. By providing an additional rebate on the home loan budget 2023, the government can make sure homebuyers can effectively keep their EMI’s under the 30% slab of their salary.
The CLSS scheme critically focuses on the economically weaker sections (EWS) and lower-income groups (LIG) meaning the benefits of government’s schemes and subsidies can reach all parts of the country. For the middle-income group (MIG) segment, the benefit was available till March 31, 2021, while for EWS and LIG segment, the benefits will be available till March 31, 2023. An extension of this scheme will ensure affordable housing is easily accessible.
Read: Piramal Finance Home Loan Interest Rate – Updated in April 2024
Scenario For Home Loan Interest Rate After Budget 2023
The home loan benefits implemented by the government so far has been a boon for the population. However, Section 80C of the income tax act is a deal-breaker here. On one side the Rs 1.5 lakh deduction on a home loan has increased home purchases, the need of the hour is to increase the home loan interest rebate in budget 2023. Adding this as a special provision or amending the act can give a major boost to the residential sector of India.
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The RBI and the central government have tried proactively to aid the sector with helpful demand boosters in the past. The cuts in stamp duty, extensions on tax benefits on affordable housing in last year’s real estate budget were significant and much-needed moves that helped made a difference for the sector. Industry experts expect a strong budget for real estate businesses to help aid robust demand in the home-buying section. Home buying is a priority category for the segment and the home loan benefits in the new budget 2023 boost can help the real estate sector significantly.
Read: Understand What a Composite Loan is and How it Can Help You
Currently, the income tax act allows interest rates on home loans to be in the range of 6.5%-7% per annum. However, for home loan applicants looking to avail of a loan of over 30 lakhs, it’s a restricting move as they can’t claim any deductions against the total interest that has been paid in the initial years. This is due to section 24(b) of the Act which sets a cap of Rs 2 lakh per annum against the interest rate on home loans.
The sector expects the government should pay attention to this and introduce aid in the upcoming home loan interest budget 2023. Increasing the tax rebate on the interest rate will be a welcome move. The real estate industry is hopeful that the tax rebate on the interest rate will be increased to at least Rs 5 Lakh from the current Rs. 2 Lakh. This is a much-needed step for the segment of home loans in budget 2023.
The much-awaited Union budget has a lot of aspirations this year around and home loan in budget 2023 is an important category that the Modi government will be paying attention to. With suitable home loan benefits in the new budget, the government will try to strengthen the real estate and banking sector of India and provide affordable housing options in every part of the country. Just in case, the sector doesn’t get a boost, you can always rely on NoBroker to get huge discounts on your search for an affordable home. With NoBroker, you choose from the best and most in-demand properties in your city and save big with our zero-brokerage promise. Comment about any of your real estate requirements under this blog and our executive team will be in touch with you shortly.
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Frequently Asked Questions
Q1. What is the union budget for 2023?
Ans. The ruling government presents the union budget in the parliament to highlight its expenditures and receipts in a fiscal year. This union budget is followed for the entire financial year in India.
Q2. What is meant by a balanced union budget?
Ans. When the revenue collection of a country through taxes and other means is equal to the revenue spending of the country for the development and other projects in a year, it is said to be a ‘balanced’ union budget.
Q3. What is meant by revenue deficit and fiscal deficit in the union budget?
Ans. The term ‘revenue deficit’ in the union budget is used when a government’s spending exceeds the income. A ‘fiscal deficit’ in the union budget is used when the expenditures, exceed total receipts in a financial year. This is excluding borrowings of the government.
Q4. What is meant by the GDP of a country?
Ans. GDP refers to the Gross Domestic Product of a country. It is a major rating that derives the standard of living of a country in a particular year based on the worth of all the official services and products produced.
Q5. What are the home loan benefits in the new budget for 2023?
Ans. The union budget of India will be presented by Finance Minister Nirmala Sitharaman on February 1, 2022. The home loan budget will also be presented at the same event.
