Homebuyers’ aspirations went unmet when Finance Minister Nirmala Sitharaman finally unveiled the Interim Budget 2024 on February 1. Even though it was centered on business facilitation, infrastructure, and agricultural development, announcements about house loans and income tax were expected. The annual budget is like the rudder steering the ship of a country’s economy. The 2024 budget for home buyers brings both challenges and opportunities for those dreaming of a place to call home.
As a key player influencing and being influenced by fiscal policies, homebuyers are important. Homebuyers were excited to see if the budgetary measures in the Interim Budget 2024 would meet their expectations. Disappointed as we are with the remaining tax rates, let’s examine the Finance Minister’s statements of the Budget 2024 and consider what they mean for prospective purchasers.
PMAY (Pradhan Mantri Awas Yojana) remains a focus
PMAY (Pradhan Mantri Awas Yojana) remains a crucial component of the Budget 2024. Sitharaman revealed that PMAY Rural was put into place despite the difficulties brought on by COVID, and the government is getting near to reaching its goal of launching three crore dwellings. To meet the demand created by a growth in the number of families, two crores more homes will be occupied in the following five years.
In addition, Sitharaman declared the opening of a middle-class housing program to assist worthy groups residing in chawls, slums, rental homes, or unapproved colonies. This program aims to assist people in purchasing and constructing their own homes.
Tax slabs will not change
In the Budget 2024 for home buyers, Finance Minister Nirmala Sitharaman declared that the economy was performing well and that investments and macroeconomic stability were strong. She emphasized in her address that when people are doing well, the average real income has increased by 50%, and people have the freedom to follow their dreams.
Thus, the finance minister announced that no tax changes are being suggested. Yet, certain tax breaks for certain revenues of certain IFSC entities, in addition to special tax breaks for start-ups and thus, the finance minister announced that no tax changes are being proposed and that the current rates for import tariffs and indirect taxes, like direct taxes, will remain in place.
Yet, certain tax breaks for certain revenues of certain IFSC entities, in addition to special tax breaks for start-ups and investments made by sovereign wealth or pension funds, are scheduled to expire on March 31, 2024. The Finance Minister suggests extending the expiration date to March 31, 2025, to guarantee tax continuity.
From now on, there will be no tax due in the amount of Rs 0–3 lakh. In addition, 5% tax will be applied to income in the Rs 3-6 lakh bracket, 10 percent to income in the Rs 6-9 lakh,15% to income in the Rs 9-12 lakh, 20% to income in the Rs 12-15 lakh bracket, and 30% tax would be applied to income exceeding Rs 15 lakh.
Old Income Tax System
Slab of Income Tax | Rate on Income |
Up to Rs 2,50,000 | NIL |
Rs 2,50,001-5,00,000 | 5% above Rs 2,50,000 |
Rs 5,00,001-7,50,000 | Rs 12,500 + 10% above Rs 5,00,000 |
Rs 7,50,001-10,00,000 | Rs 37,500 + 15% above Rs 7,50,000 |
Rs 10,00,001-12,50,000 | Rs 75,000 + 20% above Rs 10,00,000 |
Rs 12,50,001-15,00,000 | Rs 1,25,000 + 25% above Rs 12,50,000 |
Above Rs 15,00,000 | Rs 1,87,500 + 30% above Rs 15,00,000 |
New Income Tax System
Slab of Income Tax | Rate on Income |
0-Rs 3,00,000 | NIL |
Rs 3,00,000-6,00,000 | 5% |
Rs 6,00,000-9,00,000 | 10% |
Rs 9,00,000-12,00,000 | 15% |
Rs 12,00,000-15,00,000 | 20% |
Above Rs 15,00,000 | 30% |
In addition, a tax credit of Rs 52,500 will be available to any salaried individual earning Rs 15.5 lakh or more.
Misses from the real estate community
- Homebuyers would thrill at certain proposals to make home loans more affordable with rising interest rates.
- The Interim Budget 2024 was expected to prioritize affordable housing, too. Yet, in terms of the price a homebuyer must pay to acquire an asset, the announcements made in the 2024 budget for home buyers do not offer much relief to the end user.
- While buyers of homes had earnestly hoped for an increase in the income tax deduction for home loans, the authorities implemented no changes or regulations in this regard.
By lowering stamp duty and registration costs, the government could have given the housing industry even more support.
The lack of policies to solve the issue has frustrated homebuyers despite their expectations of relief and relaxation to move one step closer to their dream homes. In the face of growing inflation, a narrow focus on affordable housing that ignores the need to revise its upper limit might leave huge gaps in the housing sector’s recovery.
Conclusion
In conclusion, the 2024 budget is a complex document with ramifications for prospective homeowners that go beyond simple allocations and figures. The 2024 budget for home buyers determines market dynamics, changes the economic environment, and establishes the direction of the real estate industry.
Prospective homeowners should keep the many facets of the budget, including affordability, interest rates, taxation, infrastructure development, regional differences, environmental regulations, market stability, and technological improvements, up to date.
FAQs
What are the taxes listed in the budget, both direct and indirect?
People, as well as businesses, are subject to direct taxes, like income tax. Similar to the Goods and Services Tax (GST), indirect taxes are levied on goods and services.
What rate of economic growth is anticipated in the fiscal year 2024–2025?
Economic growth of seven percent is anticipated in fiscal year 2024–2025.
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