Budget 2013: Real estate seeks industry status, tax rebates
It has been long that the real estate experts are commanding an 'industry status'for the Real Estate.
Feb 17, 2013
Source : The Economic Times

 

New Delhi: As the Budget 2013 approaches, the developers and realty experts are keenly waiting on what the government has for the real estate sector this year. Major realty developers and experts voicetheir demand on the government. Industry status tops the agenda.

Ravi Saund, COO, CHD Developers LtdBSE -3.85 % feels, "The need of the hour is to bring in a slew of reforms to revive the Indian growth story. An ideal budget would be the one which not only caters to the Aam Aadmi's concerns but also promotes growth of various industries to provide an impetus to the sliding economy. Our expectation is a populous budget which also promotes investment and takes steps to control inflation."

Industry Status to Real Estate

It has been long that the real estate experts are commanding an 'industry status'for the Real Estate. "We demand industry status for the Real Estate sector so that we can work under a regulatory body. Thereafter, we can have benefits from all government policies which are provided to all other industries. Real estate is an unorganized sector but is the largest source of income for a mammoth part of population in our country," says Anil Sharma, Vice-President, CREDAI and CMD of Amrapali Group.

"There should be a single window clearance system and faster approval time for realty projects", adds Sharma.

Rebate in taxation

Realty sector is asking for tax exemption on interest on housing loan to be raised to Rs 3 lakh. Experts hope that under section 80 I (B) the government will give more tax rebatesfor the survivalof the real estate sector. Moreover, we are also seeking for tax exemption on EMI under section 80 (C). "As a prominent member of CREDAI, I clearly observed one thing, which is, that no one wants service tax so, I feel it should be taken back, says Sharma.

Larger allocation of funds to the infrastructure sector is another important aspect the government should look at. Dr PriyaRanjanSwarup, Director General, Construction Industry Development Council (CIDC), says, "More funds and sanction of projects to the major infrastructure sectors, such as Transportation, Affordable Housing, Renewal of Urban Infrastructure, Energy & Utilities, would certainly helpthe real estate of the country."

"Reduction in custom duty and taxes on the new construction technology, like precast technology or aluminium framework, isexpected," says Arun Singh, Senior Economist,Dun & Bradstreet Information Services India Pvt Ltd.

Boost to the affordable segment

About 60 percent buyers in real estate belong to the middle class that demand affordable homes.Therefore, the developers feel affordability is a segment which should be a priority for government policy and considered for special tax rebate.

With Union Minister for Housing and Poverty Alleviation, Ajay Maken, promising to seek an infrastructure status for affordable housing from the Finance Ministry in the upcoming budget, the developers have pinned their hopes on the same.

"There are just a few developers who are currently building affordable units. The infrastructure status to this segment will allow cash inflow in to the realty sector and prompt developers to build affordable housing. It will also give tax rebate to developers and consumers and will widen the scope of investment for property buyers," said Rajeeb Dash, marketing head, Tata Housing Development Co. Ltd

Cuts in policy rates

The cuts in home loan and policy rates can appear as a boon for the realty sector. "This would lead to the influx of liquidity in the market and would also lower interest rates, thus fuelling growth. Improved funds to facilitate better infrastructure development should be imperative," says Saund.

Sharma feels the locking period of FDI should be extended. Everyone knows that the property prices in Delhi-NCR are rising day-by-day so rebate rate for home loans should be increased to Rs 35 lakh.

 

 

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