Having given tax holiday to builders, Finance Minister Pranab Mukherjee today warned that if the incentives are not passed on to the consumers the same may not be extended in future. “I expect the developers to pass on the benefit of the tax holiday to the home buyers. It should reflect in the prices. Unfortunately it happens in our country, that they (builders) pocket it,” Mukherjee said in reply to a debate on the Finance Bill in the Rajya Sabha, which returned it completing the process of the Budget for 2009-10.
The Finance Minister said he hoped that a good sense would prevail on the builders. “Otherwise, no finance minister will provide them (benefit) in future,” he said, adding that a good businessman would keep his customers happy. The amendments to the Finance Bill provide for tax holiday in respect of profits derived from projects approved between April 1, 2007 and March 31, 2008 and completed before March 31, 2012.
The amendment to Section 80IB (10) of the Income Tax Act would allow 100 per cent exemption on income on housing projects with a maximum built up area of 1,000 sq ft in Delhi and Mumbai, and 1,500 sq ft in other places. To help revive the realty sector, the Finance Minister has already announced interest subvention of one per cent on all housing loans up to Rs 10 lakh, provided the cost of the house do not exceed Rs 20 lakh.
