)
The decision to allow additional deduction of Rs 1 lakh to taxpayers taking home loans for the first house upto Rs 25 lakhs in the year 2013-14 is marginal. Earlier this limit was there for loans upto Rs 10 lakhs but the benefit was not actually found useful to the home buyers due to various practical problems.
(Also read: Tax credit of Rs 2,000 for persons with income up to Rs 5 lakh)
None of the suggestions of real estate industry like giving industry status to real estate, allowing benefit under section 80 IB to developers to promote affordable housing or reduction of excise duty on cement or steel etc have been considered in the budget proposals.
The effect of increasing the income tax exemption from Rs 2 lakhs to Rs 2,20,000 is marginal and not sufficient to increase the purchasing power of taxpayers. The proposal to allow tax credit of Rs 2,000 against income of Rs 5 lakhs is certainly a relief to the small taxpayers.
The proposal to raise surcharge from 5% to 10% for Companies earning profit beyond Rs 10 crore is highly discouraging and is penal in nature.
Raising the excise duty on marble from 30% to 60% is also likely to affect the cost of housing.
