Tax breaks for realty sector on cards
If the demand for tax sops and incentives put forward by the the housing and urban poverty alleviation ministry (HUPA) is accepted by the finance ministry, not only the affordable housing sector but the overall infrastructure sector may get a fillip in the coming Union Budget.
Recently, Ajay Maken, the HUPA minister, submitted a detailed proposal in this regard to the finance minister as part of the Budget deliberations.
HUPA has asked for infrastructure status for the housing sector under Section 80-IA of the income tax Act. HUPA has also asked for one-year extension of the tax relief under Section 80-IB of the IT Act. HUPA has also asked for extension of the service tax exemption to all categories of affordable housing projects. Currently, the projects under JNNURM, Rajiv Awas Yojana, affordable housing in partnership and other slum rehabilitation schemes of the state governments are eligible for this exemption.
The HUPA ministry has also sought a separate creation of commercial real estate (housing) guidelines from the Reserve Bank of India (RBI). Currently, the housing sector under RBI guidelines are treated at par with the commercial real estate category.
“Ajay Maken has again put forward the demand of allocating infrastructure status to the housing sector under the Section 80-IA of the Income Tax Act. Along with this, he has also asked for a transient relief under the section 80-IB (10) and service tax exemption for affordable housing,”
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