By: Ravi Sinha
CREDAI has stressed the importance of a devising a new scheme like tax holiday to generate stock under affordable housing category. It demands that all projects with tenements below 80 sq meter in Mumbai and Delhi, and 1000 sq meter in other cities, could be exempted from taxes. Such provision under Income Tax act has shown huge results in scheme under section 80I. An interest subsidy of 7% for affordable housing tenements with a loan up to Rs 5 lakhs would go a long way in supporting the cause.
Lalit Kumar Jain, CREDAI President says there is also a need to promote large scale development of rental housing. One way of doing this is the removal of restrictions on the number of units held by an individual. With this, those who could afford to acquire property could be encouraged to do so and add to the availability of rental housing.
“Overall, the government needs to take a close look at promoting investments into housing since housing is the dire need of the hour. The securities/shares listed on stock exchanges are tax free, which revolutionised the investment scenario in the country and helped in boosting growth. A similar pattern could be made applicable to the real estate industry too,” says Jain.
R K Arora, CMD of Supertech demands that the long standing demand of Real Estate Sector to classify the housing projects where per-unit cost is Rs. 40 lakhs or less, under priority sector. So as to facilitate them to raise project loans at reasonable interest and pass on the benefit to the end users, deserves serious consideration in the current year’s Budget.
“Since the real estate sector is passing through difficult times due to the increasing raw material cost and dwindling demand for housing units, this demand from the real estate sector assumes great importance. The concern of the Government to provide good quality low cost housing to public at large will be addressed to a large extent by acceding to this request. Real Estate sector has been kept under low priority/no priority category by Banks due to which project loans are not considered by most of the Banks and where considered the rate of interest is exorbitant,” says Arora.
Well, the sector may be divided over short term as well as the long term impact of tax exemption, they nevertheless are not posturing “satisfied with whatever incentive.” They assert that the entire gamut of problems will be solved if real estate sector is given the status of Industry because the real estate ultimately takes the shape of business centers, movie theatres, hotels and group housing which all are either directly or indirectly industrial activities.
They question when in all the forums the Government is admitting that real estate is the largest employment provider and the products consumed like cement, steel etc. are basic industrial products supporting the economy, then why is real estate given a mere lollypop in the Union Budget 2012-13?