The new income tax slabs announced in Budget 2023 are seen to put more money in the hands of salaried individuals, which is likely to increase demand from home buyers. Also, increasing allocation in PM Awas Yojana (PMAY) to 66% is another positive factor for home buying. That said, this is likely to ease the pressure on home loan borrowers and paying EMIs.
in that Budget In speech on Wednesday, Finance Minister Nirmala Sitharaman increased the outlay for PMAY by 66% 79,000 crores.
while modified new income tax regime Was the showstopper of this budget. FM proposes to cap exemption 7 lakh under the new tax regime. Earlier the exemption limit was 5 lakh income in both the old and new regimes.
Apart from this, he proposed to change the tax structure in the new regime by reducing the number of slabs to five and increasing the tax exemption limit. 3 lakhs.
Under the revised new income tax slabs, no tax is levied on the salary of 3 lakh, while the salary from Rs. 3 lakh will be taxed at the rate of 5% 3 lakhs onwards 6 lakhs; at the rate of 10% from 6 lakhs 9 lakhs; at 15% rate from 9 lakhs 1.2 million; at 20% rate from 12 lakhs 1.5 million; and above at 30% rate 15 lakh salary.
Additionally, the FM has proposed to reduce the surcharge rate from 37% to 25% on the highest tax rate in the country of 42.74%, which will be a maximum rate of 39%.
How does this benefit home buyers?
According to Shrikant Srivastava, Chief Risk Officer, IMGC (India Mortgage Guarantee Corporation), the increase in PMAY funding by ₹79,000 crore is a positive step towards extending the economic benefits of the affordable housing initiative to more home buyers. PMAY has already been a huge success, so it is a wonderful step to encourage the real estate industry in general, which has a cascading effect on other sectors of the economy. The second important announcement is the increase in the urban infrastructure budget, which will have long-term implications for economic growth in general and the real estate industry in particular.
The IMGC CRO also pointed out that the personal income tax changes seem to be in favor of the new tax regime, which would simplify the existing complex tax regime. Another important component of personal tax slab adjustment is that it is rewarded most in the slab to which most of the taxpayers fall.
He said, “We know that only about 6 crore people file income tax returns, out of this ~70% have income up to 5 lakhs, while another ~15% have income up to 5-10 lakhs. Exemption up to 7 lakhs Will get the benefit of the border. a significant number of existing taxpayers while providing additional disposable income to purchase a home.”
Meanwhile, Dr. Samantak Das, Chief Economist, and Head of Research and REIS, India, JLL said, “The 2023 budget in the pre-election year sought to build on the roadmap set by previous budgets with a focus on inclusiveness.” To promote growth, development and job creation while keeping the macro-economy in a stable but growth-oriented mode. It has put more money in the hands of individuals and households, which will ease the growing pressure to a great extent. EMI and rising house prices.
Das said, “The significant increase in allocation for PMAY to 66% will help in continuing the capital flow under CLSS and other related schemes. Through urban planning, ease of land availability and promotion of TOD schemes, tomorrow’s The need to build sustainable cities has to be addressed.” Be important in the direction of sustainable development moving forward. Focus on overall infrastructure development and focus on Tier 2 and Tier 3 cities will be crucial for overall economic growth. The budget is a balanced budget for the economy, remembering the demands of the prime real estate sector.”
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