Union Budget to give a boost to Housing Sector Finance



Service Tax Imposed on all Services Provided by Centrally Air Conditioned Hospitals with 25 or more BEDS

The Union Finance Minister Shri Pranab Mukherjee while presenting the Union Budget for 2011-12 has announced that the Service Tax on Health check up or treatment imposed in 2010-11 would now be replaced with a tax on all services provided by hospitals with 25 or more beds that have the facility of central air-conditioning. Emphasising that though this Service Tax is on high-end treatment, Shri Mukherjee said that there would be an abatement of 50 per cent so that the actual burden is kept at 5 per cent of the value of service.

The Finance Minister said that the levy would be extended to diagnostic tests of all kinds with the same rate of abatement. All Government Hospitals would be outside this levy, the Minister added.



Service Tax on Air Travel Raised

The Union Finance Minister, Shri Pranab Mukherjee, while presenting the Union Budget for 2011-12, has announced that the Service Tax on air travel would be raised by Rs.50 in the case of domestic air travel and Rs.250 on international journeys by economy class.

Shri Mukherjee said that the domestic air travel on higher classes would be taxed at the standard rate of 10 per cent to bring it on par with journeys by higher classes on international air travel.



Boost to Housing Sector Finance

Various steps have been taken in this year’s union budget to give a boost to housing sector finance. The existing scheme of interest subvention of 1% on housing loans has been liberalized by extending it to housing loan upto Rs. 15 lakh where the cost of the house does not exceed Rs. 25 lakh from the present limit of Rs. 10 lakh and Rs. 20 lakh respectively.

On account of increase in prices of residential properties in urban areas, it has been proposed to enhance the existing housing loan limit from Rs. 20 lakh to Rs. 25 lakh for dwelling units under priority sector lending.

To provide housing finance to targeted groups in rural areas at competitive rates, the budget proposes to enhance the provision under Rural Housing Funds to Rs. 3000 crore from the existing Rs.2000 crore.

The Union Finance Minister Sh. Pranab Mukherjee while presenting this year’s budget has also proposed the creation of a Mortgage Risk Guarantee Fund under Rajiv Awas Yojana. This would guarantee housing loans taken by Economically Weaker Sections and Low Income Group households and enhance their credit worthiness.

To prevent frauds in loan cases involving multiple lending from different banks on the same immovable property, the Government has facilitated setting up of Central Electronic registry under the SARFAESI Act, 2002. This Registry will become operational by March 31, 2011.



Source: PIB

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