RICS:Hike Indian housing loan interest deductions
The Royal Institution of Chartered Surveyors hopes the Finance Ministry will consider hiking the housing loan interest deduction limit and bringing down home loan interest rates in the coming Budget.
A press release from RICS quoting its Managing Director and Country Head, Mr Sachin Sandhir, says RICS believes that the Ministry of Finance will consider the proposals submitted by the Housing Ministry and increase the housing loan interest deduction limit to Rs 2.5 lakh or Rs 3 lakh a year along with lowering interest rates to 7.5 per cent for loans in the range of Rs 5 lakh to Rs 30 lakh.
Given the President of India’s ambition of making India slum free in five years, it would be imperative to provide fiscal concessions for building low-cost houses. A dedicated fund for affordable housing and reintroduction of concessions under Section 80IB (10) of the Income-Tax Act, which would encourage construction of small residential units at affordable prices, are some of its expectations.
This provision would allow deduction at 100 per cent of the profits from a housing project that fulfils special conditions such as minimum plot area of one acre and maximum built-up area of 1,000 sq.ft for Delhi or Mumbai and 1,500 sq.ft for other places.
Waiver or reduction in stamp duty, value added taxes and other government taxes for economically weaker sections (EWS), lower income group (LIG) housing and restoration of tax holidays for low-cost housing projects would also support this segment.
As the industry’s wish-list is multi-fold, other announcements likely to bring joy to the sector are: further relaxation of ECB and FDI norms; rationalisation of stamp duty and registration charges; confirmation on abolition of service tax on renting immovable property already announced by the high court; clarity on extension of tax waiver for STPI units; extension of tax holiday under Section 80-IA (4)(iii) for developers who build industrial parks, which in turn would boost the otherwise impacted IT industry.
RICS hopes that levy of fresh taxes which could adversely impact the sector are avoided.
Tags: FDI, Indian housing loan interest deductions, Indian Ministry of Finance, RICS, The Royal Institution of Chartered Surveyor
July 2nd, 2009 at 12:00 am
It is indeed a good news for the builders as well as for the people who still dream of having their own house. I think there is strong need of relaxing the terms and conditions for home loans besides reducing the rates.