for Real Estate Sector to Pull the Sector out from Present Crisis
New Delhi, 19-May-2015
Under the leadership of Shri Sunil Mantri, President, NAREDCO, a delegation of few key members met with Hon’ble Finance Minister Shri Arun Jaitley on Tuesday, May 19, 2015. It was nice and healthy discussion with Hon’ble minister where he agreed on almost all the issues raised by the council. He told us that under the leadership of Hon’ble Prime Minister, Shri Narendra ji Modi, Government has decided to create 2 Cr housing units to kick start the economy, achieve higher GDP growth, create more jobs and above all provide shelter to all.
In continuation to discussion, President, NAREDCO placed before Finance Minister the important issues for his consideration which are necessary for the revival of Indian economy in general and Real Estate Sector in particular.
Mr. Sunil Mantri brought to the notice of Hon’ble Minister that Housing Sector has been kept out of the Infrastructure definition while water supply, sanitation, sewage, solid waste management, road etc which are part and parcel of a housing project are in it. He emphasized that it is our long outstanding demand that Housing should be included in the Infrastructure definition under Section 80IA of IT Act 1961 as it has the potential to improve funding of housing projects and augment supply of housing which will help in meeting the target of housing for all by 2022.
Mr. Mantri also suggested re-introduction of section 80IB (10) of IT Act to encourage developers to undertake large scale affordable housing construction, interest subvention of home loans to bring it down to 7-8 % and increase in limit of priority sector lending to Rs. 50 Lakh in mega cities where land cost id very high. He suggested that to enable middle and low income people to purchase houses Govt. may consider housing as a priority sector and extend loans at moderate interest rate, equivalent to RBI repo rate, for all housing units costing upto Rs.60 lakhs and loan limit of Rs.50 lakhs.
To provide relief to home buyers, it was suggested that home loan interest deduction available U/S 24 (b) of IT Act 1961 should be raised to Rs. 4 lakh from 2 lakh, available now, and no gain tax imposed if the sale price of a house is invested in buying one or more houses. It was also suggested that section 43CA, 50C & 56 should be reviewed to avoid double taxation. In JV, gain tax by land lord should be charged only after the completion of project and sale of property.
Mr. Mantri also requested Hon’ble Finance Minister for Restoration of tax exemptions to SEZs which was promised in 2005-06 but prematurely withdrawn in 2011-12.
President, NAREDCO apprised Hon’ble Minister that Three Joint Secretaries; Joint Secretary (Housing), Joint Secretary (JNNURM) and Joint Secretary (Consumer Affairs) are nominated by Ministry of HUPA on the Governing Council of NAREDCO and requested for the nomination of a Member (Joint Secretary Level) From Finance Ministry on the Governing Council of NAREDCO, to guide the Council on Financial Issues.
President, NAREDCO also extended an invitation to Hon’ble Finance Minister to deliver Inaugural Address in the Private Equity Conclave being planned by NAREDCO in Aug/Sep 2015 at Mumbai.