Budget 2013 wrap: Credit limit for low-cost housing likely to go up

The government is set to provide a fillip to the affordable housing segment in the coming budget as Housing ministry sources today confirmed to  CNBC-TV18 that they were not only confident of the finance minister granting infra status to low-cost housing, but also optimistic of the credit limit being raised for the same to urban poor. Affordable housing refers to apartments priced between Rs 10 lakh and Rs 20 lakh depending on real estate prices in the regional market. According to CNBC-TV18, the credit limit is likely to go up from Rs 1 lakh to Rs 5 lakh with a five percent interest subsidy on a Rs 1 lakh low-cost housing loan. [caption id=“attachment_638929” align=“alignleft” width=“380”] Reuters[/caption] The housing ministry is seeking  an allocation of  Rs 40,000 crore in the Twelfth Five Year Plan for low-cost housing.  It has also sought Rs 20,000 crore over five years  for the  new urban livelihood mission along the lines of NREGA. The finance ministry has already  directed banks to be more open to give home loans to customers, especially for those seeking loans within the Rs 20 lakh category. Half-a-dozen unfinished business from last year When the government presents its action taken report on the current year’s budget, it is going to be a bit embarrassing for President Pranab Mukherjee. According to a report in the Times of India today, at least six of Pranab’s proposals have been either modified or shelved by Prime Minister Manmohan Singh (who held the finance portfolio in the interim) and P Chidambaram, who returned to the finance ministry in August. Among the proposals are Goods and Services Tax, Direct Tax Code, General Anti Avoidance Rules and retrospective tax. As far as GST is concerned, Pranab had proposed Rs 19,000 cr compensation to states. But this was reviewed. Pranab’s fiscal deficit estimate of 5.1 percent of GDP has been revised to 5.3 percent. The implementation of GAAR, aimed at curbing tax avoidance, has been deferred by three years. According to the ToI report, the government is likely to end the suspense on Vodafone taxation in the budget. Now, LG gets tax notice on ad spend LG India is the latest to get a tax notice from the income tax department based on transfer pricing rules. According to a report in the Business Standard, an Income Tax Appellate Tribunal (ITAT) bench has ruled LG Electronics India has made “excessive" advertising and marketing spends in the country and its parent company has had notional benefits, which is liable to be taxed. According to the ruling, the advertising expenditure involves international taxation. One company in the cross hairs, Anglo-Dutch oil major Royal Dutch Shell had earlier this month it would challenge a claim its local unit underpriced shares transferred to the parent by $2.8 billion. Shell said the claim is based on an “incorrect interpretation” of tax rules and “bad in law”, a Reuters report said.