NAREDCO seeks hike in deduction limit on home loan interest

Realtors' body NAREDCO today demanded that effective GST rates should be halved to 6 per cent on under construction properties and also asked to raise deduction limit on home loan interest to Rs 3 lakh in this year's budget.
NAREDCO, as an alternative, suggested the government not to impose GST and also withdraw input tax credit to developers.
The association requested the government to incentivise developers and home buyers in the upcoming Budget to increase supply and purchasing power of home buyers to achieve the 'Housing for All' objective.
NAREDCO chairman Rajeev Talwar said the association has submitted pre-budget memorandum to the government, seeking reduction in effective GST rate, increase in deduction on home loan interest payments and industry status to the sector.

Talwar said the effective GST rate should be brought down to 6 per cent on under-construction properties from current effective rate of 12 per cent.
The GST rate should tax neutral for the end consumers, who were paying about 5.5 per tax before GST regime.

He said the industry body has also sought incentives to promote rental housing.
"Industry status is something which is long overdue to the sector. Government should help developers in getting better access to funds and also incentivise home buyers to create demand for the sector, which is facing a lot of challenges, Talwar said.
Asked about many builders not passing on the benefits of input tax credit to buyers, Talwar asked member developers to follow the provision of GST law.

NAREDCO Vice Chairman Parveen Jain said: "The real estate sector is standing at the point of inflection. To grow and fulfill the government's dream of 'Housing for All' by 2022, we need government's support in various areas."
To incentivise home buyers, NAREDCO has suggested an increase in deduction limit of interest paid on home loan, by home buyers, from Rs 2 lakh to Rs 3 lakh, Jain said.
The increase in deduction limit will see the taxable income of home buyers coming down.