The National Real Estate Development Council demanded that housing segment should be given Infrastructure Status. The national council NAREDCO was demanding it as it will enable the developers to meet the surging housing needs.
It is true that the demand for housing unit is increasing day by day. Yet, is this, the giving Infrastructure Status to the housing segment, the sole way to meet the surging demand? Many say this is not. On the other hand by gaining the infrastructure status, the developers can gain large number of tax-benefits and other similar benefits.
Kindling the light of builders’ hope, Housing ministry said that the infrastructure status can be given to the affordable housing segment. The ministry further added that it was hopeful of bringing some necessary changes in the housing segment, mainly in the affordable segment.
NAREDCO, however, was demanding infrastructure status to the entire housing segment, and not like the housing ministry which favored the affordable housing alone. The national council also has suggested making the rental housing more attractive through increasing deduction rate from the rental income.
The National Council opined that by making rental housing more attractive, the housing shortage can be met. The builders will be able to address the increased demand for housing units. The council suggested a raise in the deduction rate of income accrued through rentals. It should be raised from 30% to 50 %, it suggested.
The council also said that the deduction rate should be 100% for the women and senior citizens so as to empower both the categories. There was an opinion, slightly different from that of the council, from the MD and CEO of Tata Housing Ltd. Mr. Brotin Banerjee who said that Service Tax should be removed from the housing segment. According to Mr. Banerjee, income tax exemption limit should be raised to three lakhs besides reducing excise duty.
One thing is certain that the situation of the builders is not as smooth as it was before. Cushman and Wakefield, after conducting a study across the top cities like Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune, has reported that there was a 16% fall in the housing sales. So now you can guess what the real reason behind the builders’ demand for infrastructure status.
