Indian Real Estate Players Seek Tax Exemption for Affordable Housing Projects

Industry bodies NAREDCO, CREDAI, and FICCI have submitted a pre-budget memorandum to the Housing and Urban Poverty Alleviation Ministry, urging the government to reintroduce section 80IB (10) of the Income Tax Act for the housing sector. This move would grant 100% tax exemption on income from housing projects with a built-up area of up to 1,500 sq ft. The industry leaders argue that this will encourage affordable housing, particularly in cities like Delhi and Mumbai.

Key Takeaways:

• Indian real estate players have sought tax exemption on full income from housing projects with a built-up area of up to 1,500 sq ft to encourage affordable housing.
• Industry bodies NAREDCO, CREDAI, and FICCI have called for the reintroduction of section 80IB (10) of the Income Tax Act, which was effective until March 31, 2007.
• The developers have demanded the implementation of this section, which would provide 100% tax exemption on income from housing projects in specific areas.
• The industry leaders have requested the extension of the time-limit for one-time debt restructuring until March 2011.
• The lawmakers are considering the proposal, which could impact the affordable housing market in India, particularly in cities like Delhi and Mumbai.

Statistics:

• Built-up area for tax exemption: up to 1,500 sq ft
• Existing tax exemption limit: 1,000 sq ft in Delhi and Mumbai, 1,500 sq ft in other cities
• Current time-limit for one-time debt restructuring: June 2009
• Proposed extension of time-limit: March 2011
• Number of industry bodies supporting the proposal: 3 (NAREDCO, CREDAI, FICCI)

Sources:

• "Industry bodies upto tax exemption for housing", PTI, June 5, 2009
• "NAREDCO, CREDAI, FICCI seek tax benefits for affordable housing", Business Standard, June 5, 2009