National Real Estate Development Council (NAREDCO), an apex body of real estate sector, to-day requested Government to incentivise developers and home buyers, through upcoming budget 2018-19, to increase supply and purchasing power of home buyers with a view to achieve the Government dream of Housing for All by 2022. In this regard, NAREDCO has already submitted its pre budget memorandum, outlining various recommendations and suggestions and requested for due consideration by the Government.
NAREDCO and its office bearers feel that budget is an important opportunity to further the interests of the home buyers of the country and request Government to consider our demands sympathetically.
Commenting on the memorandum, NAREDCO Chairman Mr. Rajeev Talwar said “We have carefully spelt out our demands and suggestions pertaining to the sector for the upcoming budget. We not only want the sector to grow but also want the homebuyers to benefit. All of this should happen along with an increase in Government revenue from the sector. Our suggestions, if accepted, will be a win-win situation for all the stakeholders.”
“Industry status is something which is long overdue to the sector. Government should help developers in getting better access to funds and also incentivize homebuyers to create demand for the sector, which is facing a lot of challenges”, added Mr. Talwar.
According to NAREDCO Vice Chairman Mr. Parveen Jain “The real estate sector is standing at the point of inflection. To grow and fulfill the Government’s dream of Housing for All by 2022 we need Government’s support in various areas. Our memorandum is in line with that.”
Mr. Jain further said “Regulatory requirements are at times very harsh for the sector and affect the pace of growth. We want Government to make them realistic and in sync with genuine business expectations. Also, the sector which is facing challenges needs Government’s help to tide over the paucity of funds and flexibility in use of the funds. We hope the budget will address our concerns in this regard.”
NAREDCO’s most important demand is to bring housing under construction in 12% GST rate from 18% now with 50% abatement for land from prevailing 33%. This will bring tax rate at the level of around 6% of the property cost.
NAREDCO has suggested that the entire housing from 30 to 150 sq.mtr. Carpet area, under PMAY, should be brought under the purview of section 80 IBA of IT Act 2016, which is at the moment 60 sq.mtr. carpet area, to incentivize private developers to take up affordable housing construction at large scale to meet the supply requirement of 20 million houses by 2022. Section 80IBA provides for deduction of 100% of profit derived from such business.
To incentivise home buyers, NAREDCO has suggested an increase in cap of interest paid on home loan, by home buyers, from Rs. 2 lakhs to Rs. 3 lakhs.
To augment housing stock, NAREDCO has suggested that Capital Gain Tax if invested in building houses (one or more) should be exempted from Capital Gain Tax.
To incentivise rental housing construction in the country, which is at dismal low, in comparison to other developing and developed counties, NAREDCO has suggested a flat tax rate of 10% or increasing deduction limit from 30% to 50%. Further, NAREDCO has also suggested doing away with notional income from property held as stock in trade, by the developers.
For ease of doing business and attract investment, NAREDCO has suggested an online, streamlined and centralized project approval procedure. NAREDCO has also suggested doing away with notional income based on circle rate for computing tax on profit or gain u/s 43CA of IT Act 1961. NAREDCO hopes that the major concerns of the sector will be taken care of while finalizing the budget proposals and the industry will continue to get the support it has been getting from the Government.