Bengaluru, January 21, 2023: The Bengaluru Chapter of the real estate body for builders CREDAI Bengaluru has written to the Union Finance Minister of India Ms Nirmala Sitaraman requesting to make amendments in aspects of Direct Taxes and Indirect Taxes related to the real estate sector to enable seamless business operation .
“These measures will enable us to strengthen our participation in the economic growth of our country and the state and contribute meaningfully to the growth of Karnataka and our entire country. We at CREDAl – Karnataka, wish to participate in enabling the Honourable Prime Minister’s vision to make India into a US$ 5 Trillion economy, ” avers Mr. Bhaskar T Nagendrappa, President, CREDAI Bengaluru
“Real Estate development is one of the largest contributors to the economy on a pan- India basis, and employs millions of people in both the organized and unorganized sector. The sector creates huge employment opportunities to the skilled and unskilled workforce across the country. The vitality of the real estate development sector is a high priority therefore,” added Mr Bhaskar.T Nagendrappa.
CREDAI has requested the following amendments in direct & indirect taxes related to the real estate sector:
- DIRECT TAXES:
The present section, provisions, issues, suggestions for amendment and rationale for amendment wrt Direct Taxes on the below mentioned points :
- Affordable Housing: Amendments in Section 80IBA
- Interest as deduction for Home Buyers: Increase in limit
- New Provision for Promoting Rental Housing
- Long Term Capital Gains from Real Estate
- Sec 23(5) Tax paid on notional rent of property held in inventory
- Removal of section 43 CA for primary sale transactions
- Deduction of Loss under House Property
- Changes in Section 24 (B) for increasing interest deduction for Home Buyers
- Relaxation in provisions related to REITs
- Amendment to Section 80C to increase limit for repayment of housing loan principal or alternatively introducing another section for Deduction with respect to Principal repayment.
- Amendment in Sec 72A for encouraging Mergers and Acquisition provisions to Rescue Stalled Projects
- Provisions relating to Joint Development Agreements
- Funding from Foreign Investors
- Tax Holiday for SEZ Units and Developers
- Measures to Promote Foreign Investment
INDIRECT TAXES:
The suggestions for amendments wrt Indirect Taxes were on the below mentioned points:
- Options of Tax Rate for Construction Services
- Payment of Tax by Land Owner for Construction Services provided by Developer – Directly to the Appropriate Government
- Clarification on Mortgaged Flats – Payment of Tax by Developer under Reverse Charge Mechanism
- Clarification on Applicability of Entry 41A of Notification No 12/2017 — CT (R) for plot projects
- Clarification on Obligation of Payment of Tax on TDRs for Commercial Projects
- Clarification on Applicability of Tax on Normal TDRs (Land TDRs)
“We are hopeful that the Hon’ble Finance Minister will carry out these amendments since this will give a huge boost to the real estate sector”, felt Mr. Bhaskar T Nagendrappa.
