Industry Expectations / Recommendation - Budget 2011 - 2012
RK Jain, ED, Wave City, Ghaziabad
Income tax deduction u/s 80-IB was available to developers for affordable housing. This facility was discontinued w.e.f. 01.04.2008. This concession was highly successful in triggering affordable housing but since State laws were not permitting higher densities, the benefit of it could not be realised to fullest possible extent. Now almost all State Governments have relaxed their density norms, revival of concessions u/s 80-IB would give boost to affordable housing.
Stamp duty needs to be brought down further to 4-5% and made uniformly applicable across all states. Also, if stamp duty has already been paid on one transaction, there should be a mechanism to provide concession or a system of credit for any subsequent transactions. This would avoid the resultant cascading effect of Stamp Duty, thereby reducing the cost of a property. The concept of credit for taxes paid on subsequent transactions already exists in other statutes such as CENVAT, VAT, MAT, etc.
Section 80-IA of the Income Tax Act provides that where the gross total Income of an asessee includes any profits and gains derived by an undertaking or an enterprise from any of the business of either (i) developing or (ii) maintaining and operating or (iii) developing, maintaining and operating any infrastructure facility then a deduction equal to 100% of the profits and gains derived from such business shall be allowed for ten consecutive assessment years. Similar tax benefits should also be given to developers who are engaged in undertaking large scale urban development projects such as townships of more than 1000 acres. Such projects tend to reduce the pressure on existing cities by providing low priced alternatives and value for money to the customers.
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Union Budget