Real estate developers want to increase the tax deduction limit on real estate loans in the 2022 Union budget | Photo credit: iStock Images

Homebuilders want the limit on the tax deduction granted to mortgage borrowers to be increased from the current Rs 2 lakh to Rs 5 lakh. The industry also wants a revision of the definition of “affordable housing, a reduction in the long-term capital gains tax for the real estate sector and a new provision for the rental housing program in the budget of the city. ‘Union 2022-2023’.

Credai, the real estate industry body, in a letter to the Ministry of Finance, also requested a tax deduction for investments in real estate investment trusts (REITs). He also demanded tax-neutral consolidation of businesses through the merger merger “to help homebuyers caught in stalled housing projects,” according to an Economic Times report.

Harshvardhan Patodia, chairman of Credai, said he expects the upcoming budget to give a much needed boost to infrastructure development by introducing various relaxations and extensions. Patodia said the industry wants the Finance Department to increase the deduction limit for home buyers for tax refunds under Section 24B.

An amendment to section 80C of the Income Tax Act, 1961 to increase the time period for principal repayment of home loans or to introduce a deduction section in the context of principal repayments on loans housing; these are some of the main budget expectations of developers in the finance ministry, the report adds.

Deepak Goradia, chairman of the Maharashtra Housing Industry Chamber told ET that real estate should be placed under infrastructure status, which will bring a number of tax advantages to the sector, increase participation of foreign and local investment and will lead to an overall increase in demand.

The developers want changes to the definition of “affordable housing” that takes into account the size of the apartment ticket instead of square footage. In addition, new provisions to encourage rental housing, one-stop authorizations, input tax credit for developers are some of the other key demands.

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