Input Tax Credit under GST and an additional Rs 50,000 crore under SWAMIH are sought by NAREDCO for housing projects that are blocked

 Input Tax Credit under GST and an additional Rs 50,000 crore under SWAMIH are sought by NAREDCO for housing projects that are blocked

Input Tax Credit under GST and an additional Rs 50,000 crore under SWAMIH are sought by NAREDCO for housing projects that are blocked

In the next Union Budget for the fiscal year 2024–2025, NAREDCO has recommended to the Finance Ministry that the second tranche of the Special Window for Affordable and Middle-Income Housing (SWAMIH) Fund be introduced, with a corpus of Rs 50,000.

In order to meet the goal of Housing for All, NAREDCO has requested more financial assistance and relaxations, such as the Input Tax Credit (ITC) under the GST and rental housing incentives.

Realtors' association NAREDCO has recommended in the pre-Budget that additional funding of Rs 50,000 crore be obtained under SWAMIH to finish housing projects that have been put on hold nationwide. The association claims that this would help both the sector and customers.

In the next Union Budget for the financial year 2024–2025, the Finance Ministry has been recommended by the National Real Estate Development Council (NAREDCO) to launch the second tranche of the Special Window for Affordable and Moderate Income Housing (SWAMIH) Fund, with a corpus of Rs 50,000.

The SWAMIH Fund was established by the Center in 2019 to finish unfinished projects. Managed by SBIcap Ventures, a fully owned subsidiary of State Bank of India, the fund has a size of Rs 15,530 crore.

As of November 16, 2023, 342 applications for a total of Rs 37,554 crore have been authorized under SWAMIH, the government has notified Parliament. About 2,18,699 homebuyers would gain from this, and projects worth Rs 94,367 crore will become possible.

In order to meet the goal of Housing for All, NAREDCO has requested more financial assistance and relaxations, such as the Input Tax Credit (ITC) under the GST and rental housing incentives.

NAREDCO expressed gratitude to Union Finance Minister Nirmala Sitharaman in a letter for the Center's prompt action and effort to support the real estate market and cultivate favorable consumer attitudes.

According to NAREDCO, the completion of many projects that had reached a standstill thanks in large part to the SWAMIH Fund has rekindled interest in the Indian real estate market among both local and international investors.

It asked the government to establish the Rs 50,000 crore second tranche of the SWAMIH Fund.

"Since the ones who ultimately benefit of the fund are home buyers who are able to take delivery of their long-pending dream homes, an additional year of the loan scheme will be beneficial for both the industry and the buyers," the organization said. ,

The industry association has asked that developers of residential projects with higher GST be given the opportunity to claim input tax credits.

According to NAREDCO, accounting for estimating project costs has improved since the real estate legislation RERA was introduced.

According to their argument, ITC would also aid in boosting compliance by incentivizing developers to curtail purchases from unregistered individuals in the unorganized sector.

Extending the deadline for phase-out of "fictitious income," NAREDCO Chairman G Hari Babu requested clarification on the tax burden resulting from the idea of fictitious revenue from housing property maintained as stock-in-trade beyond two years. Modification to section 23(5) proposed. A five-year grace period to account for projected revenue.

The yearly value of unsold property under section 23(5) that is retained as stock-in-trade and not leased out shall be assessable two years after the financial year in which the completion certificate was acquired. According to the organization, the expected rent will determine the property's revenue.

"Many tenants who were taking up offices and shops have either closed down or negotiated rents to zero or Minimum fare has been paid. This is due to the three waves of Covid and the subsequent lockdown that was imposed over two years and the resulting impact on the economy."

It was proposed that notional rental income be free from taxation in order to promote rental homes.

In an effort to increase housing demand, NAREDCO has also proposed a number of additional tax changes, such as eliminating the Section 24 of the IT Act 1961's Rs 2 lakh interest deduction cap on home loans.

The industry association has suggested giving MSME status to real estate projects that meet the necessary requirements and permitting priority sector funding for real estate projects in order to aid in the improvement of liquidity for these projects.