Builders's Association of India : Seeks Hike in Exemption Limit on Home Loan Interest..!

Builders's Association of India (BAI) rencently  sought to increase exemption limit on interest of home loans to Rs. 3 lakh from the present Rs. 1.5 lakh in the Union Budget - 2013 -14 to be presented next week.

BAI Secretary Mr. Anand J Gupta said in a statement, "We demand Finance Minister Mr. P Chidambaram to hike exemption limit on interest of housing loan from present Rs. 1.5 lakh to Rs. 3 lakh in the forthcoming Union Budget to keep the pace of interest to cover cost of flats available in major parts of the country,"

Now, there is an exemption limit of Rs. 1.5 lakh for the present interest rates on housing loans ranging between 10 to 11% per annum and the amount is sufficient only on home loan up to Rs. 15 lakhs, Mr. Gupta said.

All the major towns having population more than 10 lakh hardly find any location and flats available within Rs. 15 lakh since most of the houses cost Rs. 30 lakh and above.

 "We builders feel that since Independence, out of the three basic needs - 'roti, kapda & makan' - we have successfully overcome the need for food &  clothing, but have miserably failed in solving housing problems in urban areas," the BAI official said.

There is a shortage of 3 crore houses in urban areas. Union Budget is a great instrument to frame a policy to overcome these issues, he said.

While demanding 'infrastructure status' for the real estate sector, Mr. Gupta said it will require a bold and far sighted decision on the part of the Union government to remove shortage of housing stock in urban areas, Mr. Gupta said.

Similarly, the Finance Minister Mr. P. P Chidambaram can also put rental income under the infrastructure status, he suggested.

Infrastructure status will enable them to be completely tax free and if the same status is given to real estate, it can pull resources to this sector. Such steps can check shortage of housing stock in a short period, Mr. Gupta said.

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