In his budget wish list, Amit Modi, Director, ABA Corp & President (Elect), CREDAI Western UP, points out that the real estate sector in India has been through one of the most difficult periods last year due the pandemic effected slowdown in the economy. While there was an upward trajectory in the last quarter of year 2020, due to correction in prices, availability of affordable home loans and the general realization towards the importance of having an adequate shelter during the pandemic, but to seriously start the process of sector revival, there is an urgent and definitive need for reforms from the forthcoming Budget.
Single Window Clearance: At present the multiplicity of permissions and approvals that developers are required to secure and the lack of single window clearance, it could take anywhere from 12 months to 36 months before beginning any project. Single window clearances as envisaged won’t just cut down the project delay but significantly impact the construction costs.
Exemption limit on Interest on Home loan: To support millions of first time buyers across the nation, the industry body The Federation of Indian Chambers of Commerce and Industry (FICCI) had recommended the Central government to either remove the limit for deduction of interest on housing loan under Section 24(b) or increase it from INR 200,000 to INR 10,000,000.
Principal Deduction Rules Under Section 80 C: Once again we are aligned with FICCI recommendations on the subject matter that the deduction of principal amount of housing loan repaid should not be clubbed with other deductions under Section 80C. It said that the deduction should be allowed as a deduction separately over and above the limit of INR 1,50,000 under Section 80 C. Alternatively, the limit under Section 80C should be increased to INR 3 lakh, is what the industry body had suggested and we are completely aligned with the recommendations.
Industry Status to Real Estate Sector: Allotment of “industry status” to real estate sector has been a long standing demand of the real estate players. Not having an ‘industry status’ becomes difficult for real estate sector to avail legitimate finances from Banks and other financial institutions. Industry status can help in getting low cost loans from the system, and then the cost benefit with regard to high interest loans from outside the system can be further moved on to the consumers.
Introduction of Input Credits in GST: We truly believe that the input credit regime should be brought back into the GST regime as far as the Residential Housing sector is concerned, with all the benefits being passed on to the Homebuyers, this is not only help in making the homebuying process affordable, but also shield the both buyers and developers from the cost implications of fluctuating cost of raw materials.
Reduction in Stamp Duty: Even though it is not a subject that comes under purview of Central Government, but a recent reduction in Stamp Duty cost in Mumbai has not only helped to convert pent-up demand in the mid-income and affordable segments, but also prompted the conclusion of several large-ticket transactions in the metro.
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