Affordable homes may get tax boost
HUPA has also asked for extension of the service tax exemption to all categories of affordable housing projects. This demand may also be accepted by the finance minister, a senior official indicated. Currently, projects under the Jawaharlal Nehru National Urban Renewal Mission, JNNURM, Rajiv Awas Yojana, and affordable housing in partnership and other slum rehabilitation schemes of state governments are eligible for this exemption.
If these demands indeed make it to the budget speech slated to be delivered by finance minister P Chidambaram on February 28, it may go a long way in bridging the urban affordable-housing deficit currently estimated at about 26 million, experts said. Also, the total housing loan outstanding in the country is pegged at about Rs 3.06 lakh crore, of which only about 24% is towards loans up to Rs 5 lakh, which are mostly taken by economically weaker sections and low-income groups.
The establishment of a government-supported Credit Risk Guarantee Fund will facilitate credit enablement of the urban poor as well as flow of institutional finance for affordable housing, HUPA has recommended.
Maken said that government is for active consideration of giving infrastructure status to the sector. Recently, Maken wrote to Chidambaram detailing the issues that need to be addressed in the sector.
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