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The real estate sector is expecting positive changes in the upcoming union budget, with more tax breaks, policy rationalisation, and incentivization which will provide a further boost to the sector. Developers are looking for positives in the real estate sector and want projects approved under a single-window clearance system.
Industry experts are asking the Indian government for the continuation of incentives and subsidies under the Credit Linked Subsidy Scheme. Experts want the government to increase the SWAMIH fund from Rs 5,000 crore to Rs 50,000 crore in a bid to boost residential activity and consumer sentiments in the country.
The national vice-chairman of Naredco has stated that the rate of income tax for firms/ LLPs should be aligned with the reduced corporation tax rates and be kept at about 25 per cent across the board. He added a need to finalise the state rental housing policy in order to achieve the target of the ‘Housing for All’ mission. The taxing of long-term capital gains should also be capped at 10 per cent, and for reducing the house property holding period to 12 months from the existing 24-36 months in order to be eligible for long-term capital assets.
Under the current norms, rent on a second completed, non-self-occupied property is taxable whether it is let out or not. Industry experts want this provision removed, or the Rs 2 lakh cap on home loan interest eligible for tax breaks raised to drive capital toward the residential sector. Industry experts also recommend that the limit of principal deduction on housing loans should be increased to Rs 4 lakh per annum from the current Rs 1.5 lakhs. The capital gains tax rate should be reduced from 20 per cent and the current cap ofRs 2 crore on capital gains for reinvesting in two properties should also be removed.Higher tax deductions for homebuyers should be provided by raising the deduction limit for interest payments on home loans from the existing Rs 2 lakh a year to Rs 5 lakhs. The realty sector is optimistic that the government will promote demand in the real estate sector and expect future announcements on repo rates and other measures and policies will be beneficial in the long term.
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