Budget wish list
80C should be either increased from the existing limit of R1 lakh or the principal repayments be excluded from section 80C and treated separately.
The principal repayments in such a case may be treated as a separate tax exemption component similar to interest payments on housing loans (under Section 24) which are deducted from the taxable house income and have an upper limit of R1.5 lakh.
Also, for interest payments on housing loans, the current ceiling of R1.5 lakh should be in sync with the rising interest rates and increased to at least R2.5 lakh, says Sachin Sandhir, managing director, RICS South Asia.
Experts also recommend that the home loan limit for priority sector lending (PSL) should be revised. The home loan limit of R25 lakh should be revised upwards to R35 lakh under PSL, so as to benefit an increased number of homebuyers who are currently struggling to buy property because of price escalation.
Also, bank loans to government agencies involved in construction of affordable housing units should be relaxed from the existing R5 lakh to R25 lakh per dwelling unit.
Rental housing should be encouraged by setting up public ‘housing associations’ (HAS) that construct, own, operate and manage the rental housing units.
The necessary funding could be either provided through budgetary allocations or with the credit guarantee trust fund, set up by the government last year, guaranteeing the loans taken by these HAS, adds Sanjay Dutt, executive managing director, South Asia, Cushman & Wakefield.
Yet another demand is that of infrastructure status for affordable housing. This, say experts, will help the sector get easy finance from banks at lower interest rates as infrastructure is a priority sector lending area for banks. This would mean that developers get an income tax benefit (of 100%) on their profits for 10 assessment years, say experts.
Navin Raheja, chairman and managing director, Raheja Developers, has proposed that definition of ‘infrastructure facility’ should include an integrated township and group housing development on an area of more than 10 acres.
This should involve provision of residential, educational, medical, community, commercial or institutional buildings and creation of required facilities including roads, water supply, water treatment, sanitation and sewerage systems and solid waste treatment and management systems.