New Delhi: As India’s urban population surges to 850 million by 2050, NITI Aayog has unveiled a robust set of fiscal incentives aimed at revitalising the affordable housing sector, making homes more accessible for millions while enticing developers and investors.
In a report prepared with the Ministry of Housing and Urban Affairs, the think tank recommends reinstating 100% tax exemptions under Section 80-IBA for developers — a scheme that lapsed in 2022 — to ease financial burdens and spur project completions. Additional proposals include tax breaks on profits and rental income for REIT investors, raising loan limits to ₹40 lakh under the Credit Risk Guarantee Fund, and letting the National Housing Bank issue tax-free bonds to provide low-cost funding for EWS and LIG groups.
Further relief encompasses waivers on charges for converting land use (if 50% FAR is utilised for affordable units) and exemptions from stamp duty and registration fees for PMAY Urban 2.0 projects.
These measures address key hurdles: soaring land prices, inadequate funding mechanisms, and the sector’s low-profit, high-risk profile that deters private participation. With urban dwellers expected to double from current levels, the incentives seek to lower costs for buyers, streamline fundraising, and boost supply.
If implemented, this framework could transform affordable housing from a challenged segment into a vibrant market, fostering inclusive urban growth and easing the burden on low-income families.
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