NEW DELHI:Realtors’ body National Real Estate Development Council (NAREDCO) has demanded creation of national fund to finance delayed and stalled projects in the upcoming Union Budget. The body has also asked the government to grant infrastructure status for housing, at least to cover low and MIG category housing units. Granting of infrastructure status to projects will attract large companies to the sector and inculcate corporate governance, according to Praveen Jain, President, NAREDCO.
Jain also asked the government to replace the ‘built up area’ in the Income Tax Act by the ‘carpet area’. “For the sake of convenience and uniformity in law, the ‘built up area’ in the Income Tax Act should be replaced by the ‘carpet area’ as defined in the Real Estate (Regulation and Development) Act 2016,” he said. Among other important demands, NAREDCO has called for lowering of housing loan interests between 7% and 8%, project loan interest rate between 10% and 12% and place moratorium on repayment of principal amount of all pending and new loans for three years period.
It has suggested that real estate should be brought under the purview of the Goods and Service Tax (GST), merging all taxes, duties, charges, cess etc. viz., land use conversion charges (agriculture to non- agriculture and from one land use to other land use), development charges, and subsequent possession related charges (stamp duty, transfer duty, VAT, Service Tax etc.).
In terms of other taxation related incentives, NAREDCO suggested that the sealing of Rs 1.5 lakh under Section 80C should be increased to Rs 2.5 lakh and Rs 1 lakh out of that be exclusively reserved for payment of principal borrowed for the purchase of a residential house.
Deduction on account of interest paid on home loans, under Section 24(b) should be made applicable from the year in which capital was borrowed, as for principal under Section 80C, and should be to the extent of full interest paid, at least in respect of one house.
The other demand is at least the limit of Rs 2 lakh should be raised to Rs 3 lakh for owner occupied houses. Also, three years period for acquisition/completion from the year of borrowing should be dispensed with as large number of projects are running behind the schedule, according to NAREDCO. “Supporting the industry will help consumers indirectly. It is important that government looks at incentivising the consumers in all possible ways to boost savings and sales,” said Rajeev Talwar, chairman, NAREDCO.
The Union Budget 2017-18 is scheduled to be presented on February 1.
Credits ET Realty