CII urges govt to raise tax benefits for home buyers to boost demand in real estate

Chamber says definitive plan must to boost demand in sector to meet minimum GDP growth target of 6-7%

CII, business, real estate
The consultant projected that total PE investment in real estate could drop to USD 3.5 billion in the calendar year 2020 from USD 6.4 billion last year. Photo: iStock

Confederation of Indian Industry (CII) on Thursday (January 23) urged the government to increase tax benefits for home buyers to boost demand in the liquidity-hit real estate sector.

The chamber said that in order to meet a minimum GDP growth target of 6 to 7 per cent, it is important to have a definitive plan for boosting the demand in the sector.

The sector needs more liquidity support and steps to boost demand, CII said in a statement.

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“CII has urged the government to increase the tax benefits to home buyers and extend income limit under Pradhan Mantri Awas Yojana to boost demand in the sector which is battling stress and liquidity issues for the past year,” it added.

It has also proposed a focused action plan to boost the sector as part of its pre-budget suggestions.

The chamber called for additional tax benefits to home buyers to boost the demand.

“The maximum available deduction on interest payment of home loan taken for all the property/(ies) should be increased from ₹2,00,000 to ₹5,00,000,” it said.

The government should also consider increasing the income criteria under PMAY scheme to ₹18 and ₹25 lakh from the current ₹12 and ₹18 lakh in the MIG I and ll categories, respectively.

“This would allow a wider section of the society to benefit from the scheme pushing demand,” it said.

Further, the CII said granting infrastructure status to integrated townships and overall housing sector, would help developers access priority funding at a lower cost.

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