There is no change in the income tax rates, surcharge and educational cess. To provide relief to small and marginal tax payers, personal income tax exemption limit has been raised from Rs. 2 lakh to Rs. 2.5 lakh. For senior citizens, the exemption limit is now Rs. 3 lakh. Further, the investment limit under Section 80C of the Income-tax Act has been raised from Rs. 1 lakh to Rs. 1.5 lakh. Deduction limit for interest on housing loan (for self-occupied house property) has gone up from Rs. 1.5 lakh to Rs. 2 lakh.
Government is committed to provide housing for all by 2022 by extending additional tax incentive on home loans to encourage people, especially the young, to own houses. They have also proposed to set up a Mission on Low Cost Affordable Housing to be anchored in the National Housing Bank. The Finance Minister, Shri Arun Jaitley informed the Lok Sabha while presenting the General Budget 2014-15 that a sum of Rs 4,000 crore has been earmarked for National Housing Bank with a view to increase the flow of cheaper credit for affordable housing to the urban poor/EWS/LIG segment. He further added that Government has already outlined some other incentives such as easier flow of FDI in this sector and is willing to examine other positive suggestions. He also informed the inclusion of slum development in the list of Corporate Social Responsibility (CSR) activities to encourage the private sector to contribute more towards this activity.
Shri Jaitley informed that the Rural Housing Scheme has benefited a large percentage of rural population who have availed credit through Rural Housing Fund (RHF). In the light of the above, enhanced allocations to the tune of Rs. 8,000 crore has been made for National Housing Bank (NHB) for the year 2014-15 to expand and support Rural Housing in the country.
To encourage development of Smart Cities, requirement of the built up area and capital. Conditions for FDI are being reduced from 50,000 square metres to 20,000 square metres and from USD 10 million to USD 5 million respectively with a three year post completion lock in period. To further encourage this, projects which commit at least 30 per cent of the total project cost for low cost affordable housing will be exempted from minimum built up area and capitalization requirements, with the condition of three year lock-in.
To infuse Rs. 2,40,000 crore in the Indian Banking system, citizens of India will be allowed direct share holding in these banks. The Government will also provide tax incentives for Real Estate Investment Trusts. A similar incentive will also be announced for Infrastructure Investment Trusts.