Increase tax exemption, cut lending rates, rationalise GST
Vijay C Roy
Chandigarh, January 31
Having reported strong recovery post-pandemic, the realtors are looking forward to a real estate-centric Budget. The industry is pinning hopes on critical aspects such as an increase in tax exemptions, higher incentives for affordable housing and relaxation in timelines for long-term capital gains apart from recurring demand of single-window clearance and industry status. Let’s take a look at the industry’s expectations:
Hike tax exemption limit
Under Section 24 of the Income Tax Act, one can avail of a deduction of up to Rs 2 lakh on home loan interest. “If the government increases this limit to Rs 5 lakh, it can be of a great help for both buyers and developers, as the prices and EMIs of home loans have gone up significantly,” said Ankit Goel, Director, Goel Ganga Developments.
GST rationalisation
The developer community has been clamouring for GST rationalisation. They are of the view that it should be taken into consideration. The GST on steel and cement is 28% and 18%, respectively. The prices of raw materials are soaring and they are further increased due to high GST rates. This undermines the profitability of the developer and many a times they are forced to pass it to the homebuyers. Moreover, the developers can’t claim input credit tax on residential projects. Hence, streamlining the GST regime can bring great relief to every stakeholder.
Cut stamp duty
According to Gurmit Singh Arora, national president, Indian Plumbing Association, stamp duty needs to be reduced. Following the implementation of GST regime, the industry has been burdened and it is extremely difficult for the builders to pass it on to consumers. This can be accomplished by granting waivers rather than incentivising it.
Reduce lending rates
Suren Goyal, Partner, RPS Group states, says it is essential that the government takes concerted efforts to help the industry. Overall the industry looks upbeat, but the rise in interest rates can decelerate the growth juggernaut. The government should take proactive steps to reduce lending rates. If reducing the interest rates is not feasible, then the government should offer incentives to first-time home buyers and more deductions in income tax.
