Credai seeks fiscal measures to stimulate housing demand; Increase in the mortgage interest deduction limit
The umbrella body of real estate agents CREDAI has called for various tax measures to stimulate housing demand, including an increase in the interest deduction limit on home loans to Rs 5 lakh from the current Rs 2 lakh.
In its budget recommendations to the Ministry of Finance, CREDAI, which has about 13,000 promoter members, also requested an infrastructure status for the sector and a change in the definition of affordable housing. CREDAI National President Harshvardhan Patodia expects the upcoming budget to provide the necessary impetus for infrastructure development and housing by introducing various amendments, relaxations and extensions.
“We urge the Ministry of Finance to increase the interest deduction for home buyers for the section 24 (B) tax refund in order to strengthen the general feeling of buying a home, by especially in these difficult times with the start of the third wave, ”Patodia said.
CREDAI also called for an amendment to Article 80C of the Income Tax Act to increase the limit for repayment of the principal of the housing loan, reduce the tax burden on rental housing and capital gains. long term on fixed assets. Regarding the deduction of interest on home loans, CREDAI said that “in the case of individuals, interest on first independent property should be allowed without any limits.
“Alternatively, the interest deduction limit should be increased to Rs 5 lakh for independent ownership,” he added.
CREDAI said the limit of Rs 45 lakh on the value of the property to be considered affordable housing renders subway housing ineligible for the benefits of Section 80 IBA, which promotes the development of such low cost homes. The unit value limit should be raised to Rs 75 lakh (for non-metropolitan cities) and Rs 1.50 crore (for metropolitan cities), he said.
As builders enter into Joint Development Agreements (JDAs) with landowners to develop new projects, CREDAI stressed that paying the tax at the time of the JDA while the actual consideration would be paid at a future date, acts as a brake on housing and real estate. real estate development.
“The amendment will prevent huge amounts of litigation,” the association said. Deepak Goradia, President of CREDAI-MCHI, said: “We hope that the next budget will place real estate under infrastructure status, which in turn will unlock multiple tax benefits to stimulate foreign and local investment and overall demand in the sector.
He said the government should consider significantly increasing the tax refund for home buyers. To promote rental housing, CREDAI suggested that 100% of rental income up to Rs 20 lakh per year be exempt from paying income tax, with institutions paying MAT where applicable. Established in 1999, CREDAI is the premier body for private real estate developers in India, representing more than 13,000 developers in 21 states and 217 municipal sections across the country.