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The National Real Estate Development Council (NAREDCO) has submitted a comprehensive set of recommendations to the Union Ministry of Finance aimed at revitalising the real estate sector and boosting homebuyer demand. A primary focus of the proposal is the significant enhancement of tax benefits for individuals. The apex body has called for the current Rs 2 lakh limit for interest deduction on home loans for owner-occupied houses to be raised to Rs 5 lakh or more. Additionally, NAREDCO suggested that interest deductions should be applicable from the year capital is borrowed and should cover the full extent of interest paid for at least one property.
To further ease the burden on homebuyers, the council recommended removing the current five-year deadline for project completion or acquisition required to claim interest deductions. Parveen Jain, President of NAREDCO, emphasised the broader economic impact of these changes, stating, "Rationalising taxation, especially on housing finance, will directly stimulate end-user demand, provide much-needed impetus to a sector grappling with a significant housing shortage, and offer relief to homebuyers impacted by project delays arising from cash flow constraints, while restoring overall buyer confidence". Beyond housing finance, NAREDCO is advocating for the reinstatement of the Income Tax Settlement Commission, which was discontinued in 2021. The council believes this move is essential for resolving disputes and fostering a transparent environment for investors. Dr. Niranjan Hiranandani, Chairman of NAREDCO, noted that "restoring and strengthening dispute resolution mechanisms like the Income-tax Settlement Commission is critical for fostering a transparent, investor-friendly environment in the real estate sector". He added that such reforms are vital for India's goal of becoming a developed economy by 2047. The recommendations also include broader fiscal measures, such as reducing the tax rate for non-corporate entities to 25 per cent and capping individual tax rates at 30 per cent, including surcharges and cess. To support the "Housing For All" vision, the body suggested removing the mandatory central government notification requirement for rental housing projects to qualify for deductions under the IT Act, which would better incentivise developers in that space. (ANI)
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