NEW DELHI, Jan 17: With just 15 days to go for Budget 2022, the real estate sector has pitched for separate annual deduction of Rs 1.5 lakh for homebuyers and extending housing project registration deadline to avail tax holiday.
It also sought support for the pandemic-hit industry as per infrastructure sector and an interest subsidy of 3 to 4 per cent on housing loans.
Industry veterans maintained the sector was adversely impacted by the onslaught of Covid-19 and needed support to chart a sustained recovery.
“Taxpayers have numerous investment alternatives to choose from and the lack of exclusive tax benefit on the principal amount of home loans makes consumers indifferent towards a house purchase.
“A separate annual deduction of Rs 1,50,000 for principal repayment will improve housing affordability and provide the much-needed fillip to opt for home loans,” said a Knight Frank spokesperson.
The executive further said that 100 per cent tax holiday for affordable housing projects under Section 80IBA is available for projects which are approved till March 31, 2022.
Further, this section allows developers to claim 100 per cent tax exemption on profits subject to several qualification criteria, including the approval deadline.
“Covid has delayed the registrations process and projects that would otherwise have registered on time, might not be able to make the registration deadline.
Since this is arguably the most materially meaningful measure to boost the viability of affordable housing projects, we believe it is important to extend the project approval deadline,” the spokesperson said.
Rohit Poddar, Managing Director, Poddar Housing and Development Ltd said since real estate sector is one of the biggest contributors to the GDP, strengthening the sector will also boost the allied economic activities, thereby bringing a positive turnout to the economy as a whole.
“We would expect the focus to be on providing a push to both affordable and rental housing to accommodate the rising demand in the housing sector due to the pandemic-induced change in home buying preferences. Hopefully the long due of giving the sector infrastructure status will help in building liquidity in the sector, he said.
Industry body FICCI said that housing and real estate sector can be a force multiplier for growth and for kickstarting investments/capex cycle.
“Housing and construction sectors have forward and backward linkages and impact nearly 200 sectors. The sector needs to be provided holistic support in the upcoming Union Budget. An interest subsidy of 3-4% on housing loans could also be offered for a period of 3-4 years,” Ficci said in its Budget recommendations to Finance Minister Nirmala Sitharaman.