In order to promote affordable housing, the government, in the past 5-6 years has made various tax and fiscal concessions. The financial budget of the years 2015, 2016, 2017 and 2018 has made it clear that the government is taking numerous steps to provide houses to each and every person of this country. With these implementations, it is safe to say that the focus of the government is in the right direction.

• AFFORDABLE HOUSING PROJECT: 

As per the budget of the year 2017, all the houses up to 30 sq. metres carpet area in the metro cities and up to 60 sq. metres carpet area in other cities are eligible for obtaining deduction under section 80-IBA of the Income Tax Act, 1961, under the infrastructure status. Under this segment, the following three benefits can be availed:

1. The developers will get a 100% tax concession for all the affordable housing projects approved between June 2016 and March 2019, provided these projects are completed within five years from the date of approval.
2. Goods and Services Tax (GST) on these projects will be exempt.
3. Developers will have an option of availing the FDI, which is a relatively cheaper option to obtain a housing loan.

• SBI – CREDAI PARTNERSHIP FOR AFFORDABLE HOUSING PROJECT:

State Bank of India joined hands with CREDAI, a not-for-profit company registered with the Companies Act, 2016 and started an affordable loan system for the affordable housing project wherein, a 10 basis point concession will be provided to home buyers and a 10-35 basis point concession for CREDAI’s developer members.

It was released that an investment of over Rs. 70,000 crores has been made to launch over 373 affordable housing projects. The basis point system will reduce the cost of interest to the buyer and will further reduce the price of the house.

• PRADHAN MANTRI AWAAS YOJNA (INTEREST CONCESSIONS)

Prime Minister, Narendra Modi, in his speech on 31^st December, 2017 announced that an interest subsidy of up to 4% will be provided to the people who are looking to buy/build a house in the year 2018 as part of the Pradhan Mantri Awaas Yojna.

1. Interest subsidy of 3% will be provided to the houses built in the urban area where the loan amount is up to Rs. 9 lakh.
2. Interest subsidy of 4% will be provided to the houses built in the urban area where the loan amount is up to Rs. 12 lakh.
3. Interest subsidy of 3% will be provided to the houses built in the rural area where the loan amount is up to Rs. 2 lakh.

It was also promised that the houses built would increase by 33% in the year 2018 under the Pradhan Mantri Awaas Yojna.

• DEDUCTION ON HOUSE RENT PAID:

As per section 80GG of the Income Tax Act, 1961 an individual can claim deduction on house rent paid by him under the following four conditions:

1. The employee should not be receiving House Rent Allowance (HRA) from his employer which is exempted from tax under section 10(13A) of the Income Tax Act, 1961.
2. The employee should not own any residential accommodation himself or by his spouse or minor child at a place where he ordinarily resides or performs his duties.
3. If the case is that of a Hindu Undivided Family, no residential accommodation should be owned by any of the employee’s family members at a place where he ordinarily resides or performs his duties.
4. The employee should not own any residential accommodation the value of which, is to be determined under section 23(2)(a) or section 23(4)(a), as the case may be.

The deduction available to the employee under section 80GG would be 10% of his total income subject to a ceiling of 25% thereof or Rs. 5000/-  per month whichever is less.

With the increasing attention towards ‘Makaan’, the government has truly won our hearts and given us hope that there will come a time where a common man will not have to sleep on the streets.