Aam Admi Housing – Value and Affordable housing remains a segment where government should definitely continue to provide developers with tax free status which was available earlier. Rather than restricting it to unit sizes as in the past of 1,000 / 1,500 sft per housing unit, the government could instead have a maximum per unit value of say Rs. 15 lakhs for units near Tier I Cities, Rs. 10 lakhs for Tier II Cities etc. This would enable such mass housing projects to take off in earnest across the country and benefit the currently large scale unplanned urbanization to be better planned in line with social and arterial infrastructure. Government should also propose to have credit enhancement mechanisms/ guarantees to micro housing finance companies which are just taking off since 2009-10, so that they can raise lower longer term and lower cost funds for mortgage on-lending.
Personal Tax – Current tax shields of Rs 1.5 lakhs on interest and Rs. 1 lakh on principal amount p.a. are not adequate. These need to be enhanced to at-least twice as much, with maybe a government rider allowing interest amount to be enhanced in line with the growth in interest rates based on periodic revision in the RBI policy rates. This would provide relief to genuine end users who are now faced with not only higher interest rates but also runaway inflation on household expenses– which has eaten into investible surplus and savings rates.
Investment by Insurance Companies & Pension Funds in Leased Income Properties – The past few years have witnessed a large developmental activity to develop core commercial assets, which have been leased out to credit worthy corporate and government entities. These properties are now available on a yield basis. For a better and transparent market to evolve for these alternative ‘real assets’ government should allow Insurance Companies and Pension Funds to acquire properties – the government could open up for properties in Metros and IT SEZs to start with and then over a period of time open up properties in other Cities.
Green Buildings – Even though a lot is written up and contemplated, the government does not have specific tax benefits or policies for accounting towards the higher costs incurred in Green Buildings. To enable a sustainable Green Building policy, our Government could benchmark with similar apex bodies as in Singapore Green Building Council and provide a structured approach through higher levels of depreciation and tax breaks for certified Green Buildings.
