Wednesday, March 14, 2012

Chennai realtors banking on I-T exemption, special residential zones to boost realty sector

Chennai:
Chennai realtors are expecting the Union government to enhance Income Tax exemption for up to Rs 3 lakh paid as interest on housing loans in a year from the existing Rs 1.5 lakh to boost the real estate market.

“The market, which was struggling last financial year, has picked up and we expect the government to enhance income tax exemption limit,” said Siva Krishnan, head of residential services (Chennai) Jones Lang LaSalle India.

Confederation of Real Estate Developers' Associations of India feels reforms need to be ushered in realty sector and housing policy should be amended in order to address huge demand of 26 million homes.

“One of the key concerns the real estate sector has been facing is the inordinate delay in sanction of approvals. Provision of single-window clearance for real estate development projects is the need of the hour,” says CREDAI president T Chitty Babu.

“Some of the measures like creation of Special Residential Zones could meet some of the demand of 26 million homes. Affordable housing sector should continue to grow based on the incentive given for borrowings from banks for homes and the same should be further enhanced,” Chitty Babu felt.

“The present limit for deduction under section 80C is Rs one lakh. In addition to the present deduction upto Rs one lakh, a separate limit up to Rs three lakh deduction be permitted for repayment of principal portion of housing loan for self occupied residential property,” he added.

He also said the present limit for deduction of interest against “rental income” under section 24(b) is Rs 1.5 lakh for self occupied property. This limit should be enhanced to Rs 3 lakh for self occupied property.

Currently, 36 months holding period is a must for qualification as a long term capital asset. This should be reduced and the holding period for qualification as a long term capital asset should be 12 month. He also sought reduction of tax rate on long term capital gains on transfer of house property to 10 per cent.

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