By Accommodation Times News Service
The apex body if developers CREDAI has appealed to the Finance Ministry to initiate widespread tax incentive inclusive housing policy and boost housing zone of affordability. The National President of CREDAI suggested to the ministry to allow tax exemption for small houses of under-60 sq m carpet area and creation of special housing zones with tax exemptions on the lines of SEZs for constructing 45-sq m houses for low income groups and 30-sq m houses for the economically weaker sections. It is high time that the government took a pragmatic and practical look at the real estate sector today and takes steps that help the industry in particular and the economy in general. Pointing out the benefits under the introduction relief sections 80IB and 80 IA of Income Tax act in 1998 had given a big boost to the entire economy as the direct tax benefits resulted in multiplication in indirect tax revenues of cent re and huge gains to the states through stamp duty and other taxes. Even municipal bodies earned well through octroi, premiums and cess. Besides, the employment generation was also phenomenal. Real estate contributes as much as 5.5% of to the GDP and together with the construction industry the share goes up to 11%Calling for an inclusive housing policy aimed at helping the common man realize his dream of having shelter, the developers’ body also demanded that housing should be accorded industry status. Affordable housing is treated as priority sector and the rates of interest for housing loans should be brought down to an acceptable 7.5%. Home loan should cover 90% of total cost including taxes and suggested Roll over/COD facility at par with the industry.
CREDAI also suggested a special focus on rental housing to serve the needs of a huge section of the population that may not be in a position to immediately buy houses. Funds from global resources could also be invited for this. Suggesting the formation of a proper Real Estate Investment Trust (REIT), CREDAI called for special rental housing projects under the affordable segment, treating the expenditure as capital investment for long-term capital gains, exemption from Income Tax, Service Tax, VAT and Stamp Duty for rental housing. Even the rental income from these projects must be exempted from Income Tax as the indirect benefits are far too many. External Commercial Borrowing (ECB) should be permitted as per the FDI norms and be allowed for housing financial institutions and even for all affordable housing and rental housing projects,