Budget Expectations: Need tax breaks for affordable housing in Budget: CREDAI
The future key word for the country is urbanization for growth and survival of the country. Real Estate industry is also a key trigger to the urban development and support to several other industries, apart from being capital and labour intensive.
February 23, 2012 / 11:05 IST
By Lalit Kumar Jain
The future key word for the country is urbanization for growth and survival of the country. Real Estate industry is also a key trigger to the urban development and support to several other industries, apart from being capital and labour intensive.The real estate industry suffers due to a high interest cost and discriminatory treatment meted out to it, though it is the most productive (78%) in terms of GDP contribution for every Rupee invested, apart from being a high employment provider. Lack of financial resources makes the sale components costly, which in turn impact the very principle of affordability.Urban development, in the current context, has a significant role to play in generating new jobs and providing shelter to all. It is, therefore, necessary that the Real Estate Industry is given the status of Infrastructure industry, taking a cue from the World Bank definition.CREDAI (Confederation of Real Estate Developers Association of India) has also stressed the importance of devising a new scheme like tax holiday to generate stock under affordable housing category. For instance, all projects with tenements below 80 sq meter in Mumbai and Delhi, and 1,000 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 lakh would go a long way in supporting the cause. 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 author is the National President of Confederation of Real Estate Developers Association of India (CREDAI) and CMD KUL.
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