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Below are Perspective on today's Union Budget 2021 By Arvind Hali, MD & CEO, Motilal Oswal Home Finance Ltd

“Budget FY22 has tried to bring back what the pandemic in FY21 took away - “Demand” - from Housing and Housing Finance Industry.

Today’s Union Budget has hit the right nerve holistically towards both Demand and Supply side. The extension in date of claiming additional interest deduction of Rs. 1.5 L by 1 year from Mar-21 to Mar-22 shall provide the necessary impetus to boost demand as well as create much-required positivity in the overall ecosystem. Buyers shall have more left in their hands and thus can pre-empt their decisions that were put in the cold bag. The announcement shall awaken the ones who had delayed property purchase as well as pull-up the new demand to own a house. The upper limit capping at Rs. 45 L property to claim additional deduction towards loan interest brings the apt focus i.e. affordable housing finance and affordable properties.

Similarly, on supply-side intervention, the Budget extended the tax holidays, by one year, on profits earned by developers in affordable housing projects approved by Mar21.

Other points like keeping the tax regime unchanged shall bring cheers to the LIG & MIG segments of the society which form the customer base of affordable housing finance & properties; Clear push on Infra development generates employment as well as makes affordable housing projects more accessible which are usually at the periphery of cities, and TDS exemption on dividend payment in REITs shall make them exciting investment option leading to impetus in real estate development - most of which is in the affordable segment.

It is a practical budget - a booster shot for housing & allied industry aligned to the PMAY’s Mission of Housing for All by 2022.”

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