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Modi Government's 'planning' to 'terminate' recession in the real estate sector!

Friday - June 14, 2019 2:20 pm , Category : WTN SPECIAL
Real estate sector undergoing recession after the demonetization
Real estate sector undergoing recession after the demonetization

Modi Government in preparation to 'relief' for home buyers through home loan

JUNE 14 (WTN) - After a massive victory in the Lok Sabha Elections, Modi Government is going to give many new benefits to the people of the country. The Modi Government is going to launch a number of schemes to give benefits from farmers to traders and youths to women. On July 5, the Modi Government is presenting its first full budget of its second term. According to information received from the media, the Modi Government can give a major relief to those who buy home through home loans in the first full budget of this tenure. By doing this there is a hope for a lot of relief for real estate sector, which is facing the recession after the demonetization.

It is being said that the Modi Government can give a great relief to those who take home loan in the budget to be presented on July 5. According to the information, the Modi Government can take a decision to increase the tax rebate on principal and interest on taking home loan. If this happens then middle-class people will be more benefitted from it. Let you know that it can also be a big bet of Modi Government in view of elections, because the vast middle class of the country has always been the BJP's vote bank. In such a situation, to keep its vote bank happy, the Modi Government can increase the tax rebate on principal and interest on taking home loan.

According to information received from the media, the Ministry of Finance has sought some data from the CREDAI (Confederation of Real Estate Developers) on the basis of which the Finance Ministry is evaluating the burden of tax exemption. Indeed, the period of recession in real estate sector is being seen since the demonetization. That is why, because due to the many changes made after the demonetization, the investment of black money in the real estate stopped maximally and resulted the selling of new homes has declined. In such a case, to remove the recession in this sector, the Modi Government can give a big rebate to the home buyers in the first full budget in the second term.

It is being said that the government can increase the rate of tax exemption in the rate of interest and the principal for home buyers by home loan. According to the information, the Ministry of Finance has sought information from CREDAI, a real estate organization, about how many houses are available on which home loan is going on, and how many houses are ready to be sold through home loan. On the basis of these figures, the Finance Ministry will assess that if the tax exemption limit is raised, then how much burden will it be to the treasury? According to experts, the Modi Government can increase the limit of income tax exemption on home loan interest from Rs 2 lakh to Rs 3 lakh.
 
As we told you earlier, there is a lot of slowdown in real estate sector since the demonetization. Actually, cash was used to clear black money before the demonetization in the real estate sector. But due to the large transaction by checks or online after the demonetization, there has been a lot of reduction in the black money consumption in the real estate sector. Due to government’s efforts to curb anonymity bank transactions and the demonetization, a significant reduction in cash flows has been recorded in the real estate sector.

As you know, there was a serious crisis of liquidity in the country due to the demonetization. During this time both the builders and the buyers of the house had to face the cash crisis, which led to a drastic fall in the sale of homes. Although, the builders, who were already doing their business in a transparent way, they did not have much effect after demonetization.

Prior to the demonetization, the real estate sector was the best and the large way to use the black money. But since the demonetization, because of the government's hard stance on money transactions, the home purchase, in the real estate sector, is now being mostly done through a home loan. In such a way, the Modi Government can give some exemption in the budget to promote home purchase through home loan.

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