For the real estate sector this budget didn't provide any proposals which could benefit the sector significantly. Additional interest deduction of Rs 1 lakh for low cost housing (where loan taken is less than Rs 25 lakh) in addition to the current deduction of Rs 1.5 lakh should be welcomed by the sector.
Additional allocation to rural housing fund and launch of urban housing fund should provide some relief to certain types of developers who are facing liquidity crunch. Announcement of new road projects in Gujarat, Rajasthan, MP and Maharashtra should act as a catalyst in attracting township developments in the long run.
The FM however disappointed the buyers by implementing tax deduction at source on transfer of property (land/ building) for transaction in excess of Rs 50 lakh, as this will increase compliance burden on them, increase in price of high end housing as a result of reduced abatement on service tax on such houses and increase in excise duty on commodities such as marble. From an overall policy perspective, the long standing demand for according 'infrastructure status' to the real estate sector has not been acceded to, which didn't meet the expectations of the sector.