NEW DELHI: The Confederation of Indian Industry (CII) on Thursday urged the government to increase tax benefits for home buyers to boost demand in the liquidity-hit real estate sector. The chamber said that in order to meet a minimum GDP growth target of 6 to 7 per cent, it is important to have a definitive plan for boosting the demand in the sector.
The sector needs more liquidity support and steps to boost demand, the it said in a statement.
"CII has urged the government to Increase the tax benefits to home buyers and extend income limit under Pradhan Mantri Awas Yojana to boost demand in the sector which is battling stress and liquidity issues for the past year," it added.
It has also proposed a focused action plan to boost the sector as part of its pre-budget suggestions.
"To meet a minimum GDP growth target of 6 to 7 per cent it is very important to have a definitive plan for boosting the demand in the real estate sector, which will have significant impact on job creation in both formal and informal sector, as well as a multiplier effect on overall demand," Chandrajit Banerjee, Director General of the Confederation of Indian Industry told a news agency.
The chamber called for additional tax benefits to home buyers to boost the demand.
"The maximum available deduction on interest payment of home loan taken for all the property/(ies) should be increased from Rs 2,00,000 to Rs 5,00,000," it said.
The government should also consider increasing the income criteria under PMAY scheme to Rs 18 and 25 lakh from the current Rs 12 and 18 lakh in the MIG I and ll categories, respectively. "This would allow a wider section of the society to benefit from the scheme pushing demand," it said.
Further, CII said granting infrastructure status to integrated townships and overall housing sector, would help developers access priority funding at a lower cost.