New Delhi, January 10, 2025: Dr. Niranjan Hiranandani, Chairman, NAREDCO, the national body representing the Indian real estate industry, extends its commendation to the Finance Ministry for its attentive and diligent approach to addressing the real estate industry’s concerns. In the spirit of collaboration and growth, we put forth a detailed recommendation for the upcoming FY 25-26 budget that we believe will significantly foster the development and stability of the real estate sector. Our suggestions are as follows:
Increase Funding for Affordable Housing:
The affordable housing segment is currently experiencing negative growth. We urge an escalated flow of funds to reinvigorate this crucial sector, thereby promoting inclusivity and sustainable urban development.
Enhance Home Loan Tax Deduction Limits:
To support homebuyers, we advocate increasing the tax deduction limit on home loan interest payments from Rs. 2 lakh to Rs. 5 lakh, making home purchases more affordable and stimulating market demand.
Grant Infrastructure Status to the Housing Sector:
Recognizing housing as infrastructure will unlock new avenues for investment and development, positioning the housing sector as a cornerstone of national infrastructure.
Improve Urban Infrastructure:
Alongside housing, enhancements in energy and transportation infrastructure are indispensable. We underscore the necessity of these areas for sustainable urban growth and improved quality of life.
Expand Rental Housing:
To improve rental affordability, it is imperative to expand rental housing beyond industrial workers. We recommend deleting notional income from house property held as stock-in-trade to facilitate the creation of a sufficient rental housing stock, in alignment with the ‘Housing for All’ objective.
Incentivize Investment in Rental Housing:
Current provisions that set off losses from income from house property disincentivize rental housing investment. Given the potential for real estate investment to provide a source of income during retirement years, we propose the deletion of this section.
Adjust Safe Harbour for Ready Reckoner Rates:
The current deemed tax on the difference between the Ready Reckoner/Circle rate and the market value of flats should have an increased safe harbour from 10% to 25% to reflect more realistic market conditions.
Rationalize Individual Tax Rates:
A rationalization of individual tax rate slabs from the current 37% to 25% is strongly recommended to benefit taxpayers, enhance disposable income, and incentivize market participation.
Equitable Dividend Taxation:
The rate of dividend taxation for resident investors should be maintained at 10% to ensure competitiveness and parity with NRI investors, promoting fair investment opportunities.
Reform Capital Gains Tax for Housing Purchases:
Reforms to the capital gains tax rules pertaining to the purchase of multiple houses should be implemented. This will encourage homeownership, leading to increased housing demand and greater economic stability.
We also put forward a recommendation to incentivize slum redevelopment in cities like Mumbai, which can be eliminated in the next 5 years. Promoting these initiatives will drive more individuals to buy homes, thereby boosting housing demand, providing substantial support to homebuyers, and improving the affordability index. We earnestly encourage the government to consider our recommendations for the forthcoming budget to ensure a robust and thriving real estate sector, ultimately contributing to the nation’s economic progress and prosperity.
Corporate Comm India (CCI Newswire)
