Coming out with its expectations from the union budget, the Sahara India group said that the pent-up demand for affordable housing in the country should be given top priority.
CEO, Sahara Prime City, Sushanto Roy said that to address the demand for affordable housing, the forthcoming budget should reintroduce tax holiday under section 80 IB for housing projects constructed after March 31, 2008.
The real estate sector favoured an upward revision of tax exemption to Rs 3 lakhs compared to the existing limit of Rs 1.50 lakhs available on housing loan interest payment under section 24 (b) of IT Act, which would help boost demand for residential units.
He said that the tax holiday for hotels, under section 80 ID should be extended to 10 years from existing time limit of 5 years, in view of the long standing gestation period for the industry.
Early resolution and clarification on pending issues related to Real Estate Mutual Funds (REMF) and Real Estate Investment Trust (REIT), should also be brought about said Sushanto Roy.
He wished that the Finance Minister will extend the benefit of external commercial borrowing scheme to the entire Indian real estate sector under automatic route including Special Economic Zones and not just for development of townships, hotels, hospitals with a view to benefit from low costs of borrowing internationally.
Foreign Direct Investment in the real estate sector should not be subjected to the condition of minimum three years lock in period for repartation of the original foreign investment. This, he said, shall ensure availability of greater capital and liquidity for developers to fund their existing projects.