Expectations of urban Indian from the Budget

On the 29th of February, the Finance Minister, Arun Jaitley will present the Union Budget for the year 2016-17. It is customary for various industry bodies and groups of citizens to list out their expectations from the budget. I believe the urban Indian homebuyer has a right to certain expectations from this budget that will improve the quality of life in our cities and make owning a home more accessible.

An allocation to clean the air:

We can protect our children from everything, except poison in the air. Delhi, Mumbai, Bangalore, Chennai and Pune have unsafe pollution levels. In Delhi and Mumbai, the problem reached crisis proportions this year. Given that the Modi Government has promised to cut India's carbon emissions by 35 percent by 2030, it's high time the Union Budget includes an al location to fight air pollution.
Better roads and urban infrastructure:

If you spend two hours stuck in traffic on the way to work, that's four hours a day, that's a minimum 1200 hours a year. All of our big cities are choking with traffic, bad roads, nonexistent footpaths, lack of public transport. The result is poor quality of life for the average citizen and drop in productivity for businesses. The problem needs attention and it needs attention now.

Connectivity to make homes affordable:

While India desperately needs homes constructed for the low income group and the weaker sections of society, we also need asking for homes for the middle class within our cities that are priced within the income group. Right now, our cities are managed terribly and as a result of weak transport and connectivity, any home reasonably priced is at least an hour's drive away from work. Boosting infrastructure will bring these homes closer to our work spaces. Look at London, New York and Singapore; it's all about the public transport.

Logical tax benefits on home loans:

If your home loan EMI is close to Rs 1 lakh a month, and (refer to point 3) most of EMIs are, you are paying a total of Rs 12 lakh in EMIs at the end of the year. Your tax deduction for your principal and interest payment combined is a laughable Rs 3.5 lakh. The tax deduction has not kept pace with the market and should be rationalised at least for first time home buyers.

Homebuyer-friendly tax rules:

When we buy a home that's under construction we need to pay service tax that is not levied on ready-to-occupy homes. Apart from this we can only claim deductions on the pre-EMIs after possession of the home. If possession is delayed this adds to the financial strain. If one is reinvesting capital gains in an under-construction property the property must be ready in three years to avail of this exemption. These tax rules should be rationalised.

Logical health benefits:

We can currently claim Rs 15,000 against our medical expenses, an amount that is far too low, given the cost of health care in urban India. This limit needs to be increased, as does the tax deduction of Rs 15,000 for health insurance premiums.

Limited Section 80C:

A deduction of Rs 1.5 lakh for every investment in the book, including the home loan, the PF, life insurance, PPF and school fees just to name a few. In most cases, just the home loan or the PF takes up this entire deduction, leaving no room for anything else. This deduction needs to be increased to Rs 4 lakh.

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