NEW DELHI: Builders' body NAREDCO has urged government to grant industry status to the real estate sector and also provide a moratorium period for developers so that they can complete their projects on time.
The body has also demanded an infrastructure status for the housing sector by adding a clause to the definition of 'infrastructure facility' under section 80IA of IT Act 1961, along with suggesting banks to increase their exposure to housing from 3% at present to 5% of their incremental deposits.
The real estate sector has been grappling under severe cash crunch and loan repayments by developers are getting affected due to stalled projects. "Industry status for the sector can help developers sort their cash flows and complete projects, said Naveen Raheja, Navin Raheja, Patron & Governing Council Member, NAREDCO & CMD Raheja Developers Limited, adding, "Since the developers are equally affected due to the slowdown, the government should hand hold them in these times by giving a kind of moratorium period."
NAREDCO also asked the government to implement the long-pending single window clearance system. "This process can minimise the project timeline, thereby reducing the total cost," said Praveen Jain, president, NAREDCO.
The body urged government to have a provision for 100% tax exemption for all the projects coming under the Pradhan Mantri Awas Yojna in the coming Union budget to promote affordable housing. "The government should also consider review of the current building bylaws in the budget as it doesn't facilitate mass housing and slum rehabilitation," said Raheja.
NAREDCO demanded creation of special residential zones for affordable housing on lines of special economic zones, where special concessions and incentives are in built together with single window clearances.
It also asked the residential sector to be taken out of 14.5% service tax net, and applying to the registered builders.
Among other demands from the government were increasing the deduction under section 24(b) of IT Act 1961 to Rs 3 lakh from Rs 2 lakh of interest paid on home loan, dispensation of three year period for acquisition or completion from the year of borrowing, priority sector lending to be extended for home loans up to Rs 25 lakh for small cities, Rs 30 lakh for metros and Rs 50 lakh for mega cities.
SOURCE: ETRealty.com
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