Income Tax Holiday: Realtors demand extension for affordable housing projects from FM Nirmala Sitharaman

Budget 2021 Expectations: As the Union Budget is round the corner, real estate developers have demanded from Finance Minister Nirmala Sitharaman to extend Income Tax Holiday on affordable housing announced in budget 2020. They said that this tax holiday should be extended for next two years as the benefit announced went in vain due to the COVID-19 outbreak. They also demanded curtailing of the project loan and it should be made available at 6 per cent. The real estate developers demanded from the Finance Minister that Goods and Services Tax (GST) on material and services used in affordable housing projects should be reduced to single digit.

Speaking on the income tax holiday extension for affordable housing projects Pradeep Aggarwal, Chairman at ASSOCHAM National Council on Real Estate, Housing and Urban Development said, "Income Tax holiday for Developers in Affordable Housing was given for 2020. After struggling with the pandemic situation for the entire year, it would be encouraging for developers to get this rebate for another 2 years. GST on material and services used in affordable housing should be reduced to 50 per cent or brought to single digit." Aggarwal went on to add that banks should provide Project based (land & construction) funds at 6 per cent.

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Agreeing with Pradeep Aggarwal's views; Manoj Gaur, CMD, Gaurs Group said, "We hope that the Government addresses the liquidity issue and allocates funds for infrastructural development. The Government should also think of re-introducing input tax credit in GST, bringing stamp duty and registration charges in the ambit of GST, reducing stamp duty all over the country, and increasing the income tax exemption limit of the Income Tax Act, 1961."

Gaur went on to add that the sector will also benefit if there are necessary tax exemptions, stamp duty reductions, and an increase in tax deduction under 80C to help the common man have more disposable income. The FM should revise GST for construction materials to make them more affordable, which will reflect in buyer-friendly pricing. The need is that the government should control the cartelisation of cement and steel, which is leading to unjust increase in these raw material prices.