NITI Aayog plans to revive struggling real estate sector, seeks tax sops
New Delhi :Real estate may get a tax boost from the government, with the NITI Aayog, the government’s policy think tank, in consultation with the urban development ministry, making a case for a clutch of incentives for the sector, which is in the midst of a slowdown.
The incentives will be in the form of relaxations in direct taxes and the goods and services tax (GST).
The suggestions made to the ministry of finance are aimed at reviving the struggling sector.
The move comes after the meeting chaired by Urban Development Minister Hardeep Singh Puri last week. It was attended by heads of banks and housing finance institutions, direct and indirect tax authorities, RERA (Real Estate Regulation Act) authorities, senior officials of states, and senior officials of the NITI Aayog.
After the reduction of GST rates on paints and varnishes to 18 per cent from 28 per cent, the NITI Aayog has recommended reduction in the rate for cement as well. Besides, it has suggested bringing the stamp duty within the ambit of the GST.
“The reduction in the rate for paints will give a boost to construction. It should also consider reducing the GST rate on cement to 18 per cent from 28 per cent. Construction is a great employment generator and needs government attention,” said a government official.
The policy think tank has also called for a hike in income tax deduction on interest on housing loans to Rs 350,000 from Rs 200,000 currently. “The Rs 200,000 limit may be increased to Rs 350,000 as this would correspond to the revised housing loan limit under priority lending for affordable housing announced by the RBI recently,” the note by NITI said. Further, it has suggested this deduction be allowed during the period of construction to mitigate hardships of home loan borrowers.