Bengal Peerless CEO Urges Government to Pay Attention to Real Estate Sector in Upcoming Budget
Kolkata, 25th January 2022: Real Estate Industry is one of the pillars of the Indian economy and is the second-most significant business generator in the country after agriculture and is interconnected to more than 250 allied industries. The stifling impact of the coronavirus pandemic and imposed lockdowns resulted in delayed projects followed by cash crunch. Due to these circumstances many developers are skeptical and have their reservations around the launch of new projects for which they need a rational capital flow to meet the supply pipeline and associated tasks.
After taking the situation into consideration Mr. Ketan Sengupta, CEO of Bengal Peerless Housing Development Company stated what the Real Estate industry may expect from the Union Budget 2022, according to him, “the current situation calls for additional funds to be provided to the SWAMIH in order to create pathways for successful delivery of these in-progress projects. The government can introduce a separate section under 80C for the deduction of 1.5 lakhs from home loan principal repayments. Currently, the interest rate on home loans is around 6 to 7%. Nevertheless, if someone takes a loan of more than 30 lakhs, they will not be able to deduct the full interest paid in the first few years. The deduction of interest rates is limited to 2 lakhs per year under Section 24(b) of the Act of Income Tax. The industry demands a minimum tax rebate of 5 lakh in lieu of the current 2 lakh. To increase demand, exemption on interest of housing loan to be increased under section 24(B) of budget.”
As mentioned by Mr. Sengupta, the industry is looking to redefine affordable housing since the government has initiated deductions on mortgage interest under section 80EE and 80EEA. Most people, however, couldn’t take advantage of these deductions. The definition of affordability that the RBI uses is based on loans granted by banks, not the actual financial circumstances of the borrowers. Therefore, the government should re-define affordable housing city-wise and not loan-wise, in order to make it more accessible for the general populace. If prices were revised, more residential properties would become affordable to prospective homebuyers, increasing their likelihood of purchasing a home.
He further added, “Capital gains from the sale of a house should be taxed at 10%. Furthermore, the current period of holding a house should be shortened to 12 months from the existing 24/36 months, in order to qualify for the same benefits as Long Term Capital Assets.”
Besides these expectations, Bengal Peerless is also looking for the rationalization of the prices of key raw materials such as cement and steel, among other materials for affordable housing because a regular hike in the prices of these materials has compounded the woes of developers to launch budget homes. They also expect additional income tax to be given to the rental housing.
Talking about how the pandemic has impacted the business operations drastically and how the digital transformation kept the inertia going and opened up new opportunities, Mr. Sengupta appealed that digitalization in Real Estate sector requires more attention since not all states have adopted digital meetings for building plan sanctions and Environmental approvals, which are the most time-consuming.
About Bengal Peerless Housing Development Company Ltd: Bengal Peerless endeavors to provide space to all while demanding the very least. They believe in the individual right to grow and prosper within a hospital living environment and commercial viable business space. They offer space, which is affordable as well as completely secured. Since its inception in April 1994, Bengal Peerless has successfully built about 5000 numbers of dwelling units for people of all sections of the society. The Company is planning construction of further 3000 dwelling units over a period of next four years. Bengal Peerless remain dedicated to their commitment of providing dwellings and commercial spaces of the highest quality.