New Delhi [India], July 17 (ANI): The real estate sector has put up various demands ahead of the Union Budget to support and grow the sector in India. The National Real Estate Development Council (NAREDCO) has put forth several recommendations for the sector.
The body stated that these recommendations aim to address existing challenges and stimulate growth in the real estate sector, ultimately contributing to the government’s goal of ‘Housing for All’.
It added that currently, the annual value of property held as stock-in-trade and not let out is considered ‘Nil’ for up to two years from the end of the financial year in which the construction completion certificate is obtained. After this period, the notional income is taxed. NAREDCO suggests this provision should not apply to real estate developers holding stock due to weak market conditions. Alternatively, they recommend increasing the time limit from two to five years.
“As we approach the upcoming budget, the Indian government is poised to unleash a transformative vision for the real estate sector, serving as a pivotal driver in revitalizing our nation’s economy. Industry expects a comprehensive overhaul of tax policies to foster competitiveness and efficiency across corporate and individual tax frameworks,” said Niranjan Hiranandani, Chairman, NAREDCO.
He also added that “For the home buyer, increasing the limit of interest deduction paid on home loans from 2 lacs to 5 lacs, bringing long-term capital gains at 10 per cent on par with equity shares, and reducing the period of holding house property to 12 months from the existing 24/36 months to qualify as a long-term capital asset”
Under Section 24 of the Income Tax Act, interest on loans for self-occupied property is limited to Rs 2 lakh. Given the rising property prices and interest rates, the body proposes increasing this limit to at least Rs 5 lakh.
Additionally, the current limit for setting off house property losses against other income heads under Section 71 is Rs 2 lakh, which is seen as discouraging for the industry where rental income is a major source. NAREDCO recommends removing this limit or increasing it to Rs 5 lakh.
Furthermore, NAREDCO urges the government to allow builders the option to pay GST at a concessional rate without input tax credit (ITC) or at a higher tax rate after availing of ITC. Currently, GST on affordable housing units is levied at 1 per cent without ITC and at 5 per cent without ITC on other residential units. The option to choose between concessional rates without ITC or higher rates with ITC would result in tax cost savings and better cash flows for developers, ultimately benefiting end customers.
The definition of an affordable residential apartment, which currently includes criteria for carpet area and a price cap, also needs revision. It recommends retaining only the carpet area condition without the price limit. This change would accommodate higher land prices in metro cities and extend affordable housing benefits to more projects, enabling a larger portion of the lower and middle-income population to buy homes.
“These recommendations, if implemented, will not only provide much-needed relief to developers but also stimulate demand in the housing sector. By addressing key tax and regulatory issues, we can create a more optimistic environment for both builders and homebuyers, ultimately contributing to the government’s vision of Housing for All” said G Hari Babu, President, NAREDCO. (ANI)
Disclaimer: This story is auto-generated from a syndicated feed of ANI; only the image & headline may have been reworked by News Services Division of World News Network Inc Ltd and Palghar News and Pune News and World News
HINDI, MARATHI, GUJARATI, TAMIL, TELUGU, BENGALI, KANNADA, ORIYA, PUNJABI, URDU, MALAYALAM
For more details and packages
