However, excise duty on cement, clinker--a crucial input--has been hiked from the current 8% to 10%. This is a partial rollback of the excise duty relief on cement, cement products.

``The Union Budget 2010 has offered some boost to the affordable housing sector. The 1% interest subvention on housing loans for houses costing up to Rs 20 lakh has been extended to March 31, 2011, which is a welcome move for the real estate sector. This will help in maintaining the ongoing momentum of demand for the affordable houses. Another welcome move in the Budget is the positive change in personal tax slabs. The new slabs will increase the disposable incomes which should further boost the demand for affordable housing in the coming months,'' Unitech MD Sanjay Chandra said.

``Extension of 80 (IBX) to five years will help real estate developers to get the tax benefit under section 80 (IBX). Additionally, partial roll back of excise duty on cement and cement products is a welcome move as it will help in reducing the input cost thereby making the final product somewhat economical,'' Delhi based real estate developer Emaar MGF MD Shravan Gupta said.

The residential segment has largely led the recovery with prices rising 5-25% across India. The commercial leasing segment has also been witnessing signs of recovery, even as the retail segment continues to languish. Banks are also offering aggressive mortgage rates, but rates are likely to increase by 0.5%-1% over the next six months on inflationary concerns.

Moreover, the Budget was silent on the sector's demand for cheaper capital, and faster project clearances.

Realty companies had sought an extension of tax benefits under section 80IB along with a higher deduction on interest paid on housing loans from Rs 1.5 lakh to Rs 2 lakh per year.

Shares of realty firms, led by real estate major DLF, surged on the Bombay Stock Exchange boosted by consumer friendly Budget proposals, including direct tax sops. DLF gained 6.79 % to close at Rs 308.90 on the BSE, Unitech 4.54%, Omaxe 3.84%, Parsvnath Developers 3 % and Simplex.Infra 4.6%.