There have been several major announcements in the Union Budget 2023 directly or indirectly related to real estate and infrastructure industry. Investments in infrastructure and productive capacity have a large multiplier impact on growth and employment.
Pradhan Mantri Awas Yojana (PMAY): The outlay for PMAY has been enhanced by 66 per cent to over Rs 79,000 crore. The finance minister proposed to amend provisions for computing capital gains in case of joint development of property to include the amount received through cheque etc. as consideration.
While interest paid on borrowed capital for acquiring or improving a property can, subject to certain conditions, be claimed as deduction from income, it can also be included in the cost of acquisition or improvement on transfer, thereby reducing capital gains. It is proposed to provide that the cost of acquisition or improvement shall not include the amount of interest claimed earlier as deduction.
For better targeting of tax concessions and exemptions, Sitharaman proposed to cap deduction from capital gains on investment in residential house under sections 54 and 54F to Rs 10 crore. Another proposal with similar intent is to limit income tax exemption from proceeds of insurance policies with very high value.
FM proposed to tax distributed income by business trusts in the hands of a unit holder (other than dividend, interest or rent which is already taxable) on which tax is currently avoided both in the hands of unit holder as well as in the hands of business trust.
Finance minister said, we are implementing many programmes for green fuel, green energy, green farming, green mobility, green buildings, and green equipment, and policies for efficient use of energy across various economic sectors. These green growth efforts help in reducing carbon intensity of the economy and provides for large-scale green job opportunities.
Exemption to development authorities It is proposed to provide exemption to any income arising to a body or authority or board or trust or commission, (not being a company) which has been established or constituted by or under a Central or State Act with the purposes of satisfying the need for housing or for planning, development or improvement of cities, towns and villages or for regulating any activity or matter, irrespective of whether it is carrying out commercial activity.
