Realtors apex body CREDAI has sought various tax sops to boost housing demand, including an increase in the deduction limit for interest on home loans to Rs 5 lakh from the current Rs 2 lakh.
In its Budget recommendations to the Finance Ministry, CREDAI which has around 13,000 developer members, has also sought infrastructure status for the sector and change in the definition of affordable housing.
CREDAI's National President Harshvardhan Patodia expects the upcoming budget to give the much-needed impetus to infrastructure development and housing by introducing various amendments, relaxations, and extensions.
''We urge the Finance Ministry to increase the interest deduction for homebuyers for tax rebate under section 24(B) to boost the overall home buying sentiment especially in these difficult times with the onset of the third wave,'' Patodia said.
CREDAI also demanded an amendment to Section 80C under the Income Tax Act to increase the limit for repayment of housing loan principal, reduction in the income tax burden on rental housing, and long-term capital gains on capital assets.
On interest deduction on home loans, CREDAI said that ''in case of individuals, the interest in respect of first self-occupied property should be allowed without any limit.''
Alternatively, the limit for deduction of interest should be increased to Rs 5 lakh in respect of the self-occupied property, it added.
CREDAI said the limit of Rs 45 lakh on the value of property to qualify as affordable housing renders housing in metros ineligible for the benefits under Section 80 IBA, which promotes the development of such low-cost homes.
The limit on the value of the unit be raised to Rs 75 lakh (for non-metro cities) and Rs 1.50 crore (for metro cities), it said.
As builders are entering into joint development agreements (JDA) with landowners to develop new projects, CREDAI pointed out that the payment of tax at the time of JDA whereas the actual consideration would flow in a future date, acts as a disincentive towards housing and real estate development. ''The amendment will help avoid an enormous amount of litigation,'' the association said.
Deepak Goradia, President at CREDAI-MCHI, said, ''We are hopeful that the upcoming budget will bring realty under the infrastructure status which in turn will unlock multiple tax benefits for boosting the foreign and local investment and the overall demand in the sector.''
He said the government should consider increasing the tax rebate for homebuyers significantly.
To promote rental housing, CREDAI suggested that 100 percent of the rental income up to Rs 20 lakh per annum should be exempt from the payment of income tax, with institutions paying MAT as applicable.
Established in 1999, CREDAI is the apex body for private real estate developers in India, representing over 13,000 developers through 21 states and 217 city chapters across the country.
(With inputs from PTI)
