The budget to be presented by Pranab Mukerjee in july will be highly analysed. I still remember the budget which Chidambaram presented in July 2004 immediately after earlier UPA victory, in which he announced a small amendment to FDI norms in land investment.....which later had an impact in the RE boom in subsequent years. So these budgets are important and need to be closely analyzed.

At present there is speculation that income tax limit to home loan borrowers should be raised to 3L from 1.5L. Will this again attract salaried people to borrow home loans....

]http://economictimes.indiatimes.com/Features/Home-Loans/Budget-Rs-3-lakh-I-T-relief-on-home-loan/articleshow/4665627.cms
Read more
Reply
27 Replies
Sort by :Filter by :
  • Still not been through the budget details as much info is not available online.....tommorow morning's newspapers should have printed copies of union budget 2009 in full details, for curious people.

    2 important tax benefits have also been announced which are of special interest.


      There will no more income tax surcharge for those who earn above Rs.10L per annum. (Ofcourse only those who earned above Rs.10L p.a. paid surcharge in the past, so social ists need not cry foul:D). This means a person earning 30Lp.a. or 50Lp.a. could save Rs84,000 or Rs1,40000 respectively each year. Of course this savings may not boost real estate:D as its small given RE prices, but definately it could boost consumer spending among high income groups.
      CTT or commodities transaction tax is removed. This would help commodities traders and dealers who transact in crores in commodities markets like NCDEX or MCX. I also have a feeling that government wants of encourage investors to invest in commodities futures trading. While there is no benefit announced for stock market, this special encouragement to commodities market seems to send a new signal.
    CommentQuote
  • Contra,

    As an individual who has not yet invested in RE, I also feel that there should have been an increase in income tax exemption for home loan.
    But looking from a larger perspective, I feel it is good that this has not been provided. Becoz lot of ppl have already invested in 2nd, 3rd house etc and some 10-12yrs before. By increasing a limit of 1 Lac, there wud be serious deficit.

    Reg,
    Ravi
    CommentQuote
  • Originally Posted by G_IVAR
    Contra,

    As an individual who has not yet invested in RE, I also feel that there should have been an increase in income tax exemption for home loan.
    But looking from a larger perspective, I feel it is good that this has not been provided. Becoz lot of ppl have already invested in 2nd, 3rd house etc and some 10-12yrs before. By increasing a limit of 1 Lac, there wud be serious deficit.

    Reg,
    Ravi


    Hi G_IVAR

    I have just posted the points noted down from the budget for the benefit of forum members.

    but not expressed my own opinions on the budget.

    In my world i am against all tax exemptions....there should be no tax exemptions first of all for home loan repayments. I pay my taxes fully happily...you will be surprised but expect my EPF i have no tax saving investments like insurance etc.

    Because i know none of the so called tax savings instruments really benefit the individual....it will save you 2 Rs. in tax while stealing 20 Rs. from your long term cummulative savings by giving away big commissions to agents and finance folks:D.
    CommentQuote
  • a valid point missed by many

    Originally Posted by contra
    Hi G_IVAR

    I have just posted the points noted down from the budget for the benefit of forum members.

    but not expressed my own opinions on the budget.

    In my world i am against all tax exemptions....there should be no tax exemptions first of all for home loan repayments. I pay my taxes fully happily...you will be surprised but expect my EPF i have no tax saving investments like insurance etc.

    Because i know none of the so called tax savings instruments really benefit the individual....it will save you 2 Rs. in tax while stealing 20 Rs. from your long term cummulative savings by giving away big commissions to agents and finance folks:D.

    hi contra,

    You have made an excellent point missed by many while investing in
    so-called tax-saving instruments.
    However,many who would otherwise not save or invest end up saving
    because of such ploys.:)

    regards
    unlikely
    CommentQuote
  • Sops

    These Sops benefit the bldrs most , so now they have a reason to increase the price of flat.

    Its ridicules now man, Bldrs r charging pool facing, garden facing, front facing etc etc etc.......

    There is no blank facing flat in the project
    LOL

    ABT Sops

    In Pune : FSI increase, ULCA repel, TDR's, Special town ship projects, Govt land lease to Pvt party all gobbled up by bldrs/proxies and no Affordable houses in sight only commercial bldgs and HUGE profits for these people.

    So a buyer is better OFF in budget.

    Price will hold/decrease till next budget.
    CommentQuote
  • Budget

    Here is highlight of budget

    Here are the Complete Highlights of Budget
    Fiscal deficit up from 2.7% to 6.8% of GDP
    ‘Aam admi’ is focus of all programmes and schemes .
    IT exemption limit raised; Rs 15,000 for Sr.citizens
    Limit raised by Rs 10,000 for tax payers, including women
    10% surcharge on personal income tax scrapped
    Fringe Benefit Tax abolished
    No change in corporate tax
    Defence gets Rs 1,41,703 cr, up 34%
    Total fiscal stimulus in 2008-09 amounts to Rs 1,86,000 cr
    IIFCL to evolve mechanism for increased funding of infra
    IIFCL to re-finance commercial bank loans up to 60 per cent in critical objects through PPP to tune of Rs 1,00,000 cr
    Allocations for highways being stepped up by 23 per cent
    Funds for housing, amenities for urban poor up Rs 3,973 cr
    Funds for JN Urban Renewal Mission up 87% to Rs 12,887 cr
    Assistance for storm-water drainage project up by Rs 300 cr
    Farm credit target up at Rs 3,25,000 cr from Rs 2,87,000 cr
    Interest rates incentive to farmers to repay loans on time
    Additional Rs 1,000 crore for accelerated irrigation scheme
    Export Credit Guarantee scheme extended till March 2010 * 2% interest subvention (IS) scheme extended till March 2010
    IS scheme to cover 7 job-oriented sectors, including textile, handicrafts and handlooms.
    Commodity Transaction Tax abolished
    New pension system trust exempted from STT; DDT
    Minimum Alternate Tax hiked to 15% from 10%
    Tax holiday on petro sector extended to natural gas
    100% tax deduction on political donation
    Stimulus for print media for another six months
    Fertiliser subsidy to be nutrient-based, not price
    Expert Grp to form viable pricing for imported petro goods
    Banks and insurance firms to remain in public sector
    Rs 100 cr one-time grant to expand banks in unbanked areas
    Govt committed to provide Rs 100 a day as wages under NREGA
    Allocation of Rs 39,100 cr to be made for NREGA
    NREGA coverage increased to 4.74 crore households in FY’09
    Work National Food Security scheme has begun
    Allocation for Bharat Nirman being raised by 45 per cent
    Rs 2,000 cr rural housing fund under National Housing Bank
    Mission for female literacy with focus on minorities, SC/ST * 50% of all rural women to be brought into SHG programmes
    Full interest subsidy for students in select institutions
    Five lakh students to benefit
    Modernization of national employment exchanges
    Action for social security to unorganized sector workers
    New pension benefits for 12 lakh jawans and JCOs from July
    One lakh dwelling units for paramilitary forces personnel
    Unique Identification Card to citizens in 12-18 months
    Provision of Rs 120 crore for UIC project
    Rs 2,113 crore allocated for IITs and new IITs
    Rs 3472 cr for Commonwealth Games from Rs 2112 cr
    Customs, excise and service tax base rates unchanged
    For Indira Awas Yojana, allocation increased 63%
    Incom Tax returns to be made simpler
    8 missions being launched under Plan on climate change
    Allocation for market development assistance scheme up 148%
    Allocation for Rural Health Mission raised by Rs 257 cr above interim budget
    Rs 500 cr for rehabilitation of Sri Lankan Tamils
    Rs 1,000 cr for infrastructure in cyclone-hit area in WB
    Total expenditure crosses Rs 10 lakh crore in history of India for first time.
    Share of direct taxes in revenue increased to 56% in FY’09


    A pro rural budget catering to masses but without clear reformist path
    CommentQuote
  • Missed post : Regulator

    ="http://pune-real-estate-investment.blogspot.com/2009/07/govt-plans-real-estate-model-bill-to-be.html"]Govt plans real estate model bill to be firmed up by Aug-Sept

    Govt plans real estate model bill in 100 days


    Bill for regulating the real estate sector:

    The minister for housing and urban poverty alleviation, Kumari Selja has announced a model bill for regulating the real estate sector by August-September time frame.

    Talking about the 100 day agenda for her ministry, Selja said that the Model Bill would propose a regulator and aim to address the concerns of consumers as well as the real estate industry.

    The finer details of the Model Bill could not be ascertained.

    She said, “We have initiated a dialogue with all key stakeholders including private sector, NGOs, and various States to prepare the model Bill for regulating the real estate sector.”
    ="http://www.expressestates.in/full_story.php?content_id=93855"]Express Estates
    CommentQuote
  • Friends,

    Following is the link to an article, that shows how the abolition of FBT in the budget would result in less take home pay for employees.



    It directly translates to less home loan eligibility for everyone applying new loans.In my opinion it will surely impact the confidence and financial planning of buyers who were planning new purchases.
    CommentQuote
  • Originally Posted by Sansei
    These Sops benefit the bldrs most , so now they have a reason to increase the price of flat.

    Its ridicules now man, Bldrs r charging pool facing, garden facing, front facing etc etc etc.......

    There is no blank facing flat in the project
    LOL

    ABT Sops

    In Pune : FSI increase, ULCA repel, TDR's, Special town ship projects, Govt land lease to Pvt party all gobbled up by bldrs/proxies and no Affordable houses in sight only commercial bldgs and HUGE profits for these people.

    So a buyer is better OFF in budget.

    Price will hold/decrease till next budget.

    With the projected fiscal deficit touching 12% (including central,state govt fiscal deficit and oil,fertiliser bonds) interest rates are bound to increase drastically in next 6 months along with inflation.Already bond prices have risen anticipating this.Banks will increase interest rates immediately if RBI raises rates but will takes ages to decrease it.
    So think twice before you borrow from banks to buy RE.RE prices will decrease or in worst case not increase atleast for next few years given the job market and economy and if you calculate the interest paid in these years it will be more than handfull and these times every rupee counts.
    CommentQuote
  • Originally Posted by nabishek
    Friends,

    Following is the link to an article, that shows how the abolition of FBT in the budget would result in less take home pay for employees.



    It directly translates to less home loan eligibility for everyone applying new loans.In my opinion it will surely impact the confidence and financial planning of buyers who were planning new purchases.


    good article

    now employees have to pay more income tax every year....earlier by taking food vouchers, car maintainence reimbursements, moobile bill reimbursements etc employees were avoiding some taxes....but employer was paying FBT.

    Now with FBT abolished...employer is saving taxes....but employee will have to pay more taxes....

    these negative sentiments among employees of higher annual income tax will directly affect their real estate buying at current crazily high prices.
    CommentQuote
  • All budget proposals have negative impact on RE
    CommentQuote
  • Hi , I understood from the Current Tax Code ...

    The House loan benifit abolished from the Sce80C...

    So i guess , now people can't save their tax by taking the Housing loan ...

    This will be bad hit for the Realestate Sector .....
    CommentQuote