The Central Government has so far introduced three major schemes of GST, Income Tax and Interest Subsidy to promote New Delhi
Affordable Housing , but most of the houses being launched by the developers do not fall within the government limit of affordable housing. Only 32% of the total houses launched between January and June in Delhi-NCR will come under the ambit of 1% GST, additional deduction of Rs 1.5 lakh on homelone and interest subsidy of 6.5%. The developers want the government to set different limits on the price of affordable housing for each city.
According to a report by Ainarock Property Consultants, a total of 21,600 houses were launched in NCR in the first half of 2019, of which 6970 are smaller than 60 sqm (carpet area) and less than 45 lakhs. These will attract 1% GST without input tax credit, while 68% of the houses with 5% or credit come under higher GST rate. In the budget, the government had decided to pay an additional income tax deduction of Rs 1.5 lakh (total Rs 3 lakh) on the interest of home loans for affordable houses, while up to 6.5% on 60 sqm (carpet area) houses under the Pradhan Mantri Awas Yojana. Interest subsidy is being received. Although the eligibility limit for interest subsidy has been increased to 200 sqm, there is only 4% subsidy. The Central Government has so far introduced three major schemes of GST, Income Tax and Interest Subsidy to promote New Delhi
The report said that since January, 1,39,490 units have been launched in all major cities of the country, out of which 39,840 units are within the definition of affordable. Anurak Chairman Anuj Puri said that the government should increase the price limit for at least big cities. In Delhi-NCR the limit of 45 lakhs becomes very small and the attractiveness and tendency of the customers towards the 60 sqm carpet area is also limited. The builders also hesitate to build small houses to a limit because the cost is high.
Most builders believe that the affordable price range should vary from city to city. He informed that although 1% GST has been made mandatory only on houses launched after 1 April 2019, even before that the industry had the option of higher rate with 1% or credit. Similarly, the budget will also be applicable to this launching, but if the government increases the size of the affordable size and pricing, more people will be able to take advantage of GST, deduction and subsidy.
