Developers seek sops for affordable homes
The Hindu Business Line, June 14, 2009, Page 3
S. Shanker, Mumbai
Incentives for affordable housing, higher income tax exemptions for home loans and infrastructure status for the realty segment rank high on the wish list of real estate developers.
The Confederation of Real Estate Developers Association of India (CREDAI), the apex body of developers in the country, is hoping that the Centre will accord infrastructure status to the industry, which is an off-take conduit for over 350 other small and medium industries, besides the cement and steel sector.
Mr Kumar Gera, Chairman of CREDAI, said developers were looking at incentives for units of 1,000 sq ft and below in the residential segment similar to Section 80 IB (10). Restoration of the exemptions under the Section, which has not been extended from 2007, is also high on his agenda.
Under Section 80 IB (10), in the case of construction of housing projects, hundred per cent of the profits derived in the previous year from a housing project can be deducted if the total commercial space in the project did not exceed five per cent of the total built-up area or 200 sq feet, whichever is less. CREDAI wants the Government to cap the unit price in the affordable segment at Rs 40 lakh and also classify townships of 20 acres with such homes as infrastructure development.
Industrial Parks
Another demand is for extension of the tax holiday under Section 80-IA (4) (iii), where developers enjoy tax benefits for developing and operating or maintaining and operating industrial parks. The benefits are for such parks notified up to March 31, 2009. It wants the Government to extend it to 2015. Mr Gera said some moves to extend the provision for a period of three years were on.
This apart, CREDAI looks forward to total removal of service tax for the construction industry. The association is hoping for a greater focus on rehabilitation and settlement of notified slums with provisions of tax breaks and special incentives for developers to take up projects.
FOR Buyers
For the home seeker, CREDAI wants removal of the time limit and ceilings on the deduction of interest paid on loans for acquisition/ construction of residential homes and the benefits raised to Rs 3 lakh. In the case of Tier-I cities it wants total benefit (interest and principal payment) hiked to Rs 5 lakh.
Incentives are required for rental housing, and developers want the income tax exemption on rental income raised from 30 per cent to 50 per cent.
Mr Gera said the realty sector was in dire straits and even if the Government looked for providing such incentives on a short term basis of about 12 months, it would stimulate demand and induce fence sitters to take a buy call.
Other pending issues, such as double stamp duty in sale of developed property, simplification of the Income Tax Act to reduce the assessee category to two – individual and corporate – among others appear to have been overshadowed by an unified call for infrastructure status.
The Hindu Business Line, June 14, 2009, Page 3
S. Shanker, Mumbai
Incentives for affordable housing, higher income tax exemptions for home loans and infrastructure status for the realty segment rank high on the wish list of real estate developers.
The Confederation of Real Estate Developers Association of India (CREDAI), the apex body of developers in the country, is hoping that the Centre will accord infrastructure status to the industry, which is an off-take conduit for over 350 other small and medium industries, besides the cement and steel sector.
Mr Kumar Gera, Chairman of CREDAI, said developers were looking at incentives for units of 1,000 sq ft and below in the residential segment similar to Section 80 IB (10). Restoration of the exemptions under the Section, which has not been extended from 2007, is also high on his agenda.
Under Section 80 IB (10), in the case of construction of housing projects, hundred per cent of the profits derived in the previous year from a housing project can be deducted if the total commercial space in the project did not exceed five per cent of the total built-up area or 200 sq feet, whichever is less. CREDAI wants the Government to cap the unit price in the affordable segment at Rs 40 lakh and also classify townships of 20 acres with such homes as infrastructure development.
Industrial Parks
Another demand is for extension of the tax holiday under Section 80-IA (4) (iii), where developers enjoy tax benefits for developing and operating or maintaining and operating industrial parks. The benefits are for such parks notified up to March 31, 2009. It wants the Government to extend it to 2015. Mr Gera said some moves to extend the provision for a period of three years were on.
This apart, CREDAI looks forward to total removal of service tax for the construction industry. The association is hoping for a greater focus on rehabilitation and settlement of notified slums with provisions of tax breaks and special incentives for developers to take up projects.
FOR Buyers
For the home seeker, CREDAI wants removal of the time limit and ceilings on the deduction of interest paid on loans for acquisition/ construction of residential homes and the benefits raised to Rs 3 lakh. In the case of Tier-I cities it wants total benefit (interest and principal payment) hiked to Rs 5 lakh.
Incentives are required for rental housing, and developers want the income tax exemption on rental income raised from 30 per cent to 50 per cent.
Mr Gera said the realty sector was in dire straits and even if the Government looked for providing such incentives on a short term basis of about 12 months, it would stimulate demand and induce fence sitters to take a buy call.
Other pending issues, such as double stamp duty in sale of developed property, simplification of the Income Tax Act to reduce the assessee category to two – individual and corporate – among others appear to have been overshadowed by an unified call for infrastructure status.
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