‘Axe all affordable housing taxes’

“About 35 per cent of our sales topline goes into various taxes,which eventually are paid by customers only.

If we need to provide housing to maximum number of people in the country,then affordable housing should be completely tax-free,” CREDAI NCR President Pradeep Jain told reporters here.

He also called for differential sanction fee for affordable homes,saying it was the same across the categories.”It should be different between affordable and luxury projects,” he added.

Jain also said the government should re-introduce the tax exemption scheme to develop affordable houses under the section 80IB(10) of Income Tax Act.

In the 2010-11 Budget,the government announced a one-time interim relief to the housing and real estate sector by allowing builders to complete affordable housing projects in 5 years instead of 4 years to claim deductions on profit under section under 80IB(10) of Income Tax Act.

However,this extension is available for housing projects approved on or after April 1,2005.

Under the existing provision of section 80IB(10),100 per cent deduction is allowed to developers to build affordable housing projects provided the project is sanctioned before March 31,2008.

“Income tax must be 100 per cent free for affordable homes. Besides,the time taken to approve projects should also be brought down as delay consumes lot of money,” Jain said.

Talking about the pricing scenario,he said the demand is very strong and rates of residential projects are likely to increase in the coming year.

“Prices will be going up… I think 10-20 per cent price increase will happen in 2011,” he added.

Jain,who is also the Chairman of Parsvnath Developers,said his company has raised the prices of its projects by up to 30 per cent during the last one year.

“It has been across categories and across different places in the country,” he added.