The Confederation of Real Estate Developers Associations of India Credai, the apex body of the organised real estate developers, has started propagating the great Indian middle class theme on the eve of the union budget.

A delegation from Credai recently met finance minister Pranab Mukherjee and impressed on him that affordable housing for the great Indian middle class is the need of the hour. Santosh Rungta, president, Credai, told FC Estate, The thrust of our recommendations has been affordable housing.

We have recommended incentives, which would be beneficial to both home buyers as well as developers. The recommendations relating to amendments in the Income Tax Act on income from other sources, extension on limit of deduction for repayment of principal amount of a home loan, tax benefits on slum redevelopment projects and external commercial borrowings in real estate will be of considerable help to home buyers and also help in developing the sector.

These incentives shall increase the supply of housing at affordable prices. Kumar Gera, chairman, Credai, said, There is a massive housing requirement in the country, which if addressed, can act as a stimulator for employment as well as for improving India GDP.

Credai has always championed the cause of the real estate effort in India. All the recommendations put forth by us will help in bringing about more transparency and simplicity to the processes, while at the same time they will address needs of various stakeholders.

Some of Credai recommendations include: Section 56(2) of the Act should not be made applicable to the transfer of immovable property this would provide a fair amount of relief to the consumers, ECB to be permitted for funding construction costs of at least those real estate projects that qualify for 100 per cent FDI ECB being an alternative source of low- cost borrowings for the developers will help them optimise cost.

Which can be passed on to the end consumers by way of price reduction, the time limit for notification of industrial parks be extended to March 31, 2015 and also all pending applications filed under the Industrial Park 2002 scheme should be approved expeditiously, extension of tax holiday for housing projects under section 80 IB (10) to allow for conceptualising of new projects while also encouraging more projects to come up in view of the incentive and extension of tax holiday for housing projects under section 80 IB (10) to allow for conceptualising of new projects while also encouraging more projects to come up in view of the incentive.

The other demands include a single window clearance system for integrated townships to expedite the process as 30- 40 approvals are required for such projects, service tax should not be levied on renting of immovable property as it does not qualify as goods and hence is not covered under the ambit of GST service tax.

Pranab Datta, vice-chairman & managing director of Knight Frank India said Income Tax exemption u/s 80 IB (10) should be extended to include projects constructed after March 31, 2008. While benefits are available under this section, these benefits do not percolate to the intended recipients. Certain loopholes were addressed by the 2009-10 budget.

However, a lot more has to be done to benefit the middle class. Along with the restriction on the size of housing units, a restriction on the value of the apartment and eligibility of buyers based on income will also serve the purpose. The scheme has to be redesigned in a manner that makes it user friendly and should be monitored so that it benefits the house buyer rather than maximising wealth in the hands of the developer, Datta said.

While we list housing amongst the three basic necessities of life, India is dealing with an acute housing shortage. Besides, shifting slum dwellers to proper houses solves several problems. Therefore, we advocate that affordable housing and integrated township projects be provided an infrastructure status. By providing this status, these projects will have a better access to funds. For instance, these projects will also benefit from the increase in allocation to the IIFCL which lends to the infrastructure sector.

Popularity: 1% [?]