NAREDCO seeks rationalisation of taxes, focus on affordable rental housing, and resumption of subvention scheme
With just over two weeks to go for the upcoming Union Budget announcement, National Real Estate Development Council (NAREDCO) has expressed hope of a Budget that is in sync to meet their long-standing industry demands including rationalisation of taxes, focus on affordable rental housing, and resumption of subvention scheme.
It said that in the aftermath of the COVID-19 pandemic with the Indian economy grappling with the challenges of recovery, expectations from the upcoming Union Budget are high.
Dr. Niranjan Hiranandani, National President, NAREDCO, said the fiscal impetus announced under Aatmanirbhar Bharat has led to renewed consumer demand that led to the emergence of green shoots in the Indian economy and real estate sectors, which now needs to be supported.
Rajeev Talwar, Chairman, NAREDCO said, “Interest on housing loans should be fully allowed under Income Tax deduction without any ceiling. The current limit of interest deduction under Section 24 of IT Act 1961 on a housing loan of Rs 2 lakh should be removed to incentivise home buyers and spurring overall demand. Also, loss from house property should be fully allowed to be adjusted against other heads of income. In case of unadjusted loss, it should be fully allowed to be carried forward to subsequent years.”
In a statement, NAREDCO said that since pandemic life has brought back the prominence of owning a house, the need to meet ‘Housing for All’ demand has to be backed by innovative fiscal impetus and robust outlays.
Presenting its ‘wish list’ for Union Budget 2021, the real estate body suggested enhancing loan to value ratio up to 90 per cent across the board for home loans for affordable houses of Rs 30 lakh or less. It said that the same facility should be extended to MIG and HIG.
For affordable rental housing, it sought enhancement in HRA tax exemption; an increased depreciation rate for the rental projects like in commercial buildings, and allowing ‘carry on’ of loss from rental income.
“To promote rental housing, The deduction of 30 per cent from the annual rental income (for purpose of maintenance) should be increased to 50 per cent,” it said.
Suggesting measures to improve liquidity, it said the one-time restructuring of loans will play an important role. The apex real estate body also sought to lift the ban on subvention schemes.