Budget 2025: NAREDCO Advocates for Increase in Housing Loan Interest Tax Deduction
Budget 2025: NAREDCO Chairman Niranjan Hiranandani urges for an increase in the tax deduction limit for housing loan interest payments, aiming to boost the affordable housing sector.
Budget 2025NaredcoHousing Loan InterestAffordable HousingTax DeductionReal Estate NewsJan 06, 2025
Speaking after a pre-budget meeting with Finance Minister Nirmala Sitharaman, NAREDCO Chairman Niranjan Hiranandani emphasized the need to raise the current limit from ₹2 lakh to ₹5 lakh.
Hiranandani, with over 40 years of experience in the real estate sector, highlighted that this is the first year where affordable housing growth has shown a negative trend.
He stressed, “The focus on the Pradhan Mantri Awas Yojana scheme to incentivize affordable housing is crucial.
We need to ensure that the flow of funds into this sector is increased to meet the housing demands of the growing population.”
Hiranandani also pointed out that the current tax deduction limit of ₹2 lakh is too low to make a significant impact on the housing market.
“To make housing more affordable and accessible, the permissible deduction under the Income-Tax Act needs to be increased to at least ₹5 lakh,” he stated.
Apart from the tax deduction hike, NAREDCO is advocating for the recognition of the housing sector as infrastructure.
This move would facilitate easier access to funding and promote the development of more affordable housing projects.
“There was also a discussion about housing being considered as infrastructure status, which would help in making more funds available for affordable housing,” Hiranandani added.
The meeting, which included key industry leaders such as GMR Group Business Chairman BVN Rao, Afcons Infrastructure Limited Managing Director S Paramassivan, and ReNew Group Chairman Sumant Sinha, addressed several other issues.
These included the need for incentives for rental housing and the resolution of capital gains tax loopholes.
Hiranandani noted that while the last budget introduced incentives for industrial workers' rental housing, a broader focus on rental housing is essential.
“We have been talking about ownership housing, but it’s high time we recognize the importance of rental housing as well,” he said.
Additionally, the meeting discussed the capital gains tax on the purchase of houses.
Currently, if a person sells a house and buys two houses, the capital gains tax is exempt.
However, this exemption does not extend to those buying three houses, which can be a significant issue for families with multiple children.
“We suggested that the finance minister address these loopholes to make the tax system more equitable,” Hiranandani explained.
Larsen & Toubro (L&T) head of indirect taxes, Gurinder Pal Singh, emphasized the growing international presence of Indian infrastructure companies.
He stated, “L&T revenues are now largely coming from offshore projects.
We need more proactive support from the government to resolve issues when we work in foreign territories.”
In summary, NAREDCO’s recommendations aim to address the pressing needs of the affordable housing sector.
By increasing the tax deduction limit, recognizing housing as infrastructure, and addressing rental housing and capital gains tax issues, the council hopes to see a significant boost in the housing market, benefiting millions of Indians in need of affordable homes.
Frequently Asked Questions
What is NAREDCO?
NAREDCO stands for the National Real Estate Development Council, a prominent organization representing real estate developers and stakeholders in India. It plays a crucial role in shaping policies and advocating for the interests of the real estate sector.
What is the current tax deduction limit for housing loan interest in India?
The current tax deduction limit for housing loan interest in India is ₹2 lakh under Section 24 of the Income-Tax Act.
Why is NAREDCO pushing for an increase in the tax deduction limit?
NAREDCO is pushing for an increase in the tax deduction limit to make housing more affordable and accessible, especially in the affordable housing sector. The current limit is considered too low to have a significant impact on the housing market.
What other key issues did NAREDCO discuss during the pre-budget meeting?
NAREDCO discussed several key issues, including the recognition of the housing sector as infrastructure, the need for incentives for rental housing, and the resolution of capital gains tax loopholes.
How does the recognition of housing as infrastructure status help?
The recognition of housing as infrastructure status would help in making more funds available for affordable housing projects, facilitating easier access to funding and promoting the development of more affordable homes.
Related News Articles
MahaRERA to Host Workshops for Seamless Transition to New Website
MahaRERA to conduct training sessions for real estate stakeholders to navigate new website and MahaCRITI system
Goa CM Supports Minimal GST on Housing, Gets Backing from Ministers
Chief Minister Pramod Sawant stated that the recently reconstituted group of ministers (GoM) on the real estate sector believed that the Goods and Services Tax (GST) on housing should be minimal.
Avoiding Housing Project Delays: A Homebuyer's Guide to Due Diligence
Close to 2000 under-construction housing projects remain stalled, jeopardizing consumers' investments. Homebuyers must do their due diligence when choosing a real estate development partner.
Why India Should Allow Chinese FDI: Sanjeev Sanyal
Economist Sanjeev Sanyal bats for foreign direct investment from China, citing benefits for India's exports and manufacturing sector.
Raymond’s Real Estate Arm Signs Joint Development Deal in Mumbai’s Mahim
Raymond's real estate subsidiary, Ten X Realty West, has inked a joint development agreement for a residential project in Mahim, central Mumbai, with an estimated value of Rs 1800 crore.
Arkade Developers to Revamp Malad West Project in Mumbai
Real estate giant Arkade Developers is set to undertake a significant redevelopment project in Malad West, Mumbai. The project, covering an area of 6,858.90 square meters, promises to redefine the local landscape with modern amenities and sustainable desi