The budget expectedly extended existing tax sops for affordable housing but did not pay heed to the demands made by the real estate sector to abolish GST for under-construction homes or bring back input tax credit.

The FM proposed additional deduction of interest up to Rs 1.5 lakh for loan taken to purchase affordable house would be available for homebuyers till March 31, 2022. She also announced that affordable housing projects would continue to avail a tax holiday for one more year, till March 31, 2022. Such exemption is provided under Section 80-IBA of the Income Tax Act.

“Calcutta is the city where 60 per cent of the projects are in the affordable segment. I feel we would witness the launch of more such projects,” said Sushil Mohta, chairman of Merlin Group.

While the announcements were on expected lines and welcomed by the industry, the industry was disappointed that GST related changes did not find favour.

“This year’s budget is a disappointment for the real estate industry..Stock in hand for developers after two years of completion is considered as deemed demand and taxed under section 23(5). A relaxation of the said section would have been a favourable outcome for the real estate industry,” Ketan Sengupta, MD of Bengal Peerless, said.

Harsh Neotia, chairman of Ambuja Realty, observed that sectors such as hospitality and tourism — important components of real estate developments — did not find mention in the budget.