National Real Estate Development Council (NAREDCO) has expressed its disappointment over the budget presented by the Finance Minister as far as the housing sector is concerned. The apex body in its Pre budget Memorandum had asked for many concessions including the conferring infrastructure status to the housing sector, but it got only one concession i.e. the extension of limit of deduction of interest paid on home loans upto Rs. 25 lakh from 1.5 lakh to 2.5 lakh. This is indeed a welcome step.
NAREDCO was expecting inclusion of housing under the Infrastructure category under section 80 IA of the Income Tax Act and deduction of income derived from investment on construction of houses as available u/s 80IB of IT Act 1961 upto 1200 sq ft to encourage affordable housing.
Service Tax on houses more than 2,000 sq ft area or more than Rs. one crore cost has gone up from 3% to 3.6% because of reduction in abatement from 75% to 70% which will impact home buyers in big cities.
1% TDS on transactions of immovable properties more than Rs. 50 lakhs will impact owners of smaller properties in big cities and may lead to exchange of black money.
Rural housing fund of Rs. 6 lakh Crores and urban housing fund of Rs. 2,000 crores are positive steps for the housing market in India.
The increase in rail freight on coal, cement and steel imposed in Rail Budget will push the cost of construction by about 5%. Navin Raheja President
Source : Accommodation Times News Services
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