Budget 2018: NAREDCO expects that with union budget, the housing of 30 to 150 sq.mtr. carpet area should come under the section 80 IBA of IT Act 2016.
Budget 2018: On February 1, the Union Budget 2018 will be unveiled by finance minister Arun Jaitley. In a request to the finance minister and Modi government, the National Real Estate Development Council (NAREDCO) today held a conference in New Delhi where they shared the concerns about the sector and gave suggestions to the government. During the meeting, a request was floated to the government that it should incentivise developers and home buyers in the union budget 2018. The request is in place to increase to achieve the government’s dream of Housing for All by 2022. The budget 2018 is very important for the Modi government as it comes after the implementation of Goods and Services Tax (GST) and also before the 2019 Lok Sabha elections.
NAREDCO expects that in the union budget, the government should bring under construction houses under the GST tax rate of 12 per cent. As of now, the housing under construction falls under 18 per cent tax rate. The suggestion by NAREDCO will bring tax rate at the level of around 6% of the property cost.
The real estate apex body expects the government to review the section 80 IBA of IT Act 2016. It expects that under the budget 2018, the entire housing from 30 to 150 sq.mtr. carpet area should come under the section 80 IBA of IT Act 2016. As of now, the section has the housing which fit particular criteria that it housing with 60 sq.mtr. carpet area.
This move by the government is expected to help the real estate sector achieve the dream of ‘Housing for all by 2022’. As of now, NAREDCO states that the number of houses required to fulfill government’s dream will take around 20 million houses, which can be achieved if relaxation is made by the government in union budget 2018.
As for the home buyers, the real estate body expects that there should be an increase in the cap of interest paid on the home loan from Rs. 2 lakhs to Rs. 3 lakhs. The real estate body also expects the government to incentivise rental housing construction in the country. When compared with the rest of the world, the rental housing construction in India is at a dismal low. NAREDCO has suggested that a flat tax rate of 10 per cent or increasing deduction limit from 30 per cent to 50 per cent.