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Budget 2018: Arun Jaitley proposes setting up affordable housing fund

In line with the government’s aim to provide housing for all by 2022, the Union Budget on Thursday proposed to set up an affordable housing fund under the National Housing Bank (NHB).

The 2017 budget had proposed to assign infrastructure status to affordable housing projects and facilitate higher investments.

“My government will also establish a dedicated affordable housing fund in the National Housing Bank funded from priority sector lending shortfall and fully serviced bond authorised by the government of India," finance minister Arun Jaitley said, while presenting the Union budget in Parliament.

With the objective of boosting the supply of rural housing and augmenting the supply of affordable housing in urban areas, Jaitley said that 3.7 million homes will be built in urban areas in 2018-19 and 5.1 million homes in rural areas.

The finance minister also proposed that no adjustment shall be made in respect of transactions in immovable property, where the circle rate value does not exceed 5% of the consideration. This would minimize hardship in real estate transactions.

“Currently, while taxing income from capital gains, business profits and other sources in respect of transactions in immovable property, the consideration or circle rate value, whichever is higher, is adopted and the difference is counted as income both in the hands of the purchaser and seller. Sometimes, this variation can occur in respect of different properties in the same area because of a variety of factors including shape of the plot and location," Jaitley said.

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