Incorporate tax incentives to boost housing sector, suggest real-estate developers
The forthcoming annual Budget must make provisions for tax incentives, to reduce the cost of houses for buyers. This would positively impact the real estate market, which would propel the economy out of its current slowdown.
Real estate developers Credai and Naredco suggested increasing the present limit of Rs. 1,50,000 on interest payment of home loans that can be deducted from taxable income of homebuyers. This limit, determined a decade ago, would get exhausted on a loan of 15 lakhs, whereas the average price of apartments in metro cities is 50 lakhs. It is also suggested that deduction under Section 24 be made applicable from the year of borrowing of capital.
Deduction against principal repayment has been suggested, stating that the ceiling of Rs. 1 lakh under Section 80 C be increased to Rs. 2 lakh, from which Rs. 1 lakh be exclusively reserved for payment of principal. Homebuyers and developers suggest that if the cap on deduction against the interest payment on home loan under Section 24 is not increased to Rs 5 lakh, this provision under Section 80 EE should be continued. Naredco also argues that the cap on allowed deduction on rental income be increased to 50% for general investors, excepting women and senior citizens.
Developers want the TDS (tax deduction at source) at 1% of the sale value of a property of more than Rs 50 lakh under Section 194-IA to be eliminated. They also wish for the streamlining of approval processes, to avoid project delays.
Source -The Times of India
average price of apartments in metro cities is 50 lakhs, Budget 2014, Budget 2014 Real estate, deduction under Section 24, forthcoming annual Budget, incentives to boost housing sector, Real estate developers Credai
There is a lot of expectation from budget 2014. We also expect there will be hike in ceiling of Rs. 1 lakh under Section 80 C which may increased to Rs. 2 lakh.
We expect policy or incentives to boost housing sector and union budget 2014 may have policy or scheme for affordable homes in India.