FM pushes for affordable homes

In the Budget for 2011-12,  Mukherjee proposed 100 per cent tax deductions on capital expenditure to develop affordable houses under government scheme, thus promoting builders to focus more on such homes.

“Considering the importance of housing, I propose investment linked deduction to businesses, which develop affordable housing under a notified scheme,” he said. Currently under the section 35AD of the Income Tax Act, a housing project for slum re-development and rehabilitation is incentivised with 100 per cent tax exemption.

The incentives are extended to “developing and building a housing project under a scheme for affordable housing framed by the central government or a state government. Mukherjee also raised the limit for one per cent interest subsidy on home loans to up to Rs 15 lakh from the current level of Rs 10 lakh. The value of houses eligible for availing such subsidy by Rs 5 lakh to Rs 25 lakh.