Union Budget 2021: Here's what real estate sector wants from govt in upcoming Budget
New Delhi | Jagran Business Desk: Ahead of the Union Budget 2021, the Builders Association of India (BAI) Jharkhand Centres has written a letter to the Finance Ministry asking it for relief in works contracts and real estate sector in the Union Budget 2021. In the letter, the BAI requested the government to give benefits of the input tax credit on the purchase of goods and services for commercial leasing or rental.
According to the BAI, the above-mentioned demands will provide relief to work contractors and real estate developers across the country, who have been hit hard during the Coronavirus crisis and subsequent lockdown and restrictions.
BAI President Rohit Aggarwal, as reported by Dainik Jagran, said that currently, GST is to be paid on rental income, while input tax credit (ITC) facility is not provided at the time of its construction.
He also said that the limit of tax exemption should be increased in the coming budget so that the demand for houses can increase. Along with this, the tax exemption available on the principal in repaying the home loan under 80C should also be increased. Currently, 80C gets a discount of up to 1.5 lakh rupees. It also includes the payment of the principal of the home loan.
He also said that the limit for constructing affordable housing in 60 sqm in metropolitan cities and 90 sqm in non-metropolitan areas have been fixed. Its price should not be more than 45 lakh rupees, he said.
The BAI, in its letter, suggested that GST rates should also be reduced in under-construction houses. Currently, it attracts 5 per cent GST. It should be reduced to zero per cent tax for a few months. At present, one per cent tax is levied on affordable housing projects and 5 percent on non-affordable housing projects.
It was also stated that the deadline for the Pradhan Mantri Awas Yojana's credit subsidy scheme for the medium income group category is March 2021. This subsidy scheme can be extended till March 2022 next year.
The BAI suggested that the infra industry sector should be exempted from section 194N of the Income Tax Act, 1961 for at least 5 years to overcome their cash flow shortage and complete the projects on time without any hindrance. Section 80 IBA's affordable housing projects should be implemented to extend benefits to first homeowners by extending the High Sector Criteria to achieve the government's mission for housing for all.
Rohit Aggarwal said that one of the main expenses of Works Contractors is related to purchase of petrol-diesel etc. for maintenance of vehicles and machinery. Inclusion of these products under the GST regime does not provide for the input tax credit on payment of VAT on these products. Petrol, diesel and other petroleum products should be included in the purview of GST. He also demanded that the real estate sector be given industry status.
Posted By: Talibuddin Khan