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NEW DELHI, March 6

THOUGH the real estate sector has welcomed the Finance Minister's decision to continue with the existing income tax rebate up to Rs 1,50,000 in the housing sector, there is a section of the industry, which feels that the Government has overlooked the overall growth of the industry.

Speaking to Business Line, Col. Prithvi Nath, Vice-President, National Real Estate Development Council, said, "The Finance Minister's Budget proposal is futuristic and his decision to continue the IT sop on housing will greatly boost the industry."

Dr P.S. Rana, Senior Executive Director, Housing and Urban Development Corporation has also lauded Mr Jaswant Singh's proposal under Section 80 IB, related to exemption of income tax from housing projects. The tax exemption was earlier only for those housing projects which had been approved prior to March 31, 2001 and are completed by March 31 2003. The date of approval of projects has now been extended up to March 31, 2005, and the benefits of this scheme have also been made available irrespective of the year of construction.

However, Dr Rana also pointed out that even though the Finance Minister has liberalised the provision relating to Section 80 (IB) by removing the limitation of date of completion of housing projects eligible for tax exemption, the other restrictive conditions relating to minimum area limit for the project and maximum built-up area for dwelling units to continue to exist. "Removal of these restrictive conditions would have improved the efficacy of this particular incentive significantly," remarked Dr Rana.

Voicing his opinion, Mr Susheel Ansal, Chairman, Ansal Properties Ltd, felt that these steps would not only boost housing to a great extent but also the allied economies.

However, real estate consultancy companies such as Cushman and Wakefield and CB Richard Ellis feel that the overall real estate sector has hardly found any mention in the Budget.

Said Mr Sanjay Verma, Executive Director, Cushman and Wakefield, "Contrary to general expectations, the real estate industry has still failed to figure in the policy maker's agenda. The Government has once again deferred the crucial issue of foreign investments into real estate.

While FDI in real estate is allowed, it is restricted to certain types of developments and have stipulations of minimum development size as well as repatriation of investments.

While the real estate sector was also expecting some radical reforms in the regulatory environment, it has not received any attention in this Budget."

Agreeing with Mr Verma, Mr Anshuman Magazine, Managing Director, CB Richard Ellis said that apart from continuing the tax rebates on housing, the Government could have also looked at commercial real estate in order to boost the industry.

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