I-T Rate On Affordable Housing Projects Be Lower

New Delhi: apex body CREDAI has suggested that the government in the upcoming Budget should fix income tax on affordable housing projects at only 15 per cent, saying this would help enhance supply of low-cost homes that have maximum demand. The Confederation of Real Estate Developers’ Associations of India (CREDAI), which represents more than 13,000 developers, has made many suggestions for the upcoming Union Budget to address critical challenges faced by the sector.

The recommendations include revision of definition of affordable housing, tax sops to real estate companies to build affordable homes and enhancing deduction limit of principal and interest paid by individuals on home loans. CREDAI has expressed serious concern over falling share of affordable housing segment in total fresh supply in the past few years. With reduction in supply, the share of affordable homes in the overall sales has also come down.

It has stressed on the need to arrest this declining trend on a priority basis. “To boost the supply of affordable housing, CREDAI recommends extending the lower 15 per cent income tax rate, currently available to manufacturing companies, to affordable housing projects,” the association said. The industry body believes that this measure would incentivise developers to increase their focus on affordable housing developments. With prices in the real estate sector increasing by over 50 per cent since the affordable housing definition was introduced in 2017, CREDAI has urged the government to revise the existing cap of Rs45 lakh.