Real estate industry seeks tax breaks

With the Union Budget for 2023-24 slated to be tabled on February 1, the National Real Estate Development Council (NAREDCO), the apex body real estate industry, has put forward its pre-Budget recommendations to the government. In its memorandum to the government, NAREDCO has suggested the real estate industry could become more productive and thrive, if certain regulations and taxation blocks are eliminated, particularly those concerning the deduction of interest for customers looking for a home loan, besides the tax load on developers working on affordable and rental housing. It has also recommended amending or removing certain sections of the Income Tax Act, and incentivising business entities and individual investors looking to invest in the capital-intensive sector. It, however, did not pinpoint those sections under the relevant Act. Further, the apex real estate body has urged the government to remove Section 23(5) of the Income Tax Act, which deals with notional rental income from the housing. “Developers should be exempted from the burden of tax on notional rental income under Section 23(5), said Rajan Bandelkar, president of NAREDCO, adding that the idea of notional rent levied opposes the idea of promotion of rental housing in India. The year 2022 ended on a firm note, with a rise in sales of residential properties in major metros. Commercial leasing, too, saw a revival after the Covid lull.