Mumbai: Housing experts predict that smaller homes, especially 1-BHK (bedroom hall kitchen) flats, will be constructed within the Mumbai Metropolitan Region itself and they suggest that prices for the same should be lower than those of bigger homes. The reason behind this move is the announcement in the budget that has extended income tax deduction benefits to developers for smaller homes.
According to Dr Sanjay Chaturvedi, executive editor of Accommodation Times, a newspaper on the realty sector, the benefits earlier was limited to non-metro cities and now extended in metro cities too. Under this, the builder is exempted of various taxes, including service tax and even stamp duty.
Earlier, this benefit was on built-up area, but now it has been brought to carpet area. “To promote the Affordable Housing Scheme, profit-linked income tax deduction is changed to carpet area instead of built up area of 30 and 60 square metres, which will be counted for making the deduction. This will extend the benefit to those with bigger houses,” said Rohan Agarwal, managing director, Geopreneur Group.
A one BHK flat normally comes under 30 square metres in the affordable segment. The whole budget has focussed on this segment. In Mumbai and its periphery the construction of smaller houses had come to a stand still and builders mostly concentrated on large homes. “This move will give a boost to construction of small houses. The rates will also come down. So in the future, one can see the construction of smaller houses within city limits and prices also will be lower than others,” said Dr Sanjay Chaturvedi.
Kamal Khaitan, chairman and managing director, Sunteck Realty, a leading developer, claimed that even if the time frame for such projects have been increased from three to five years this will further help the realty industry. He said, “The initiative to promote affordable housing was that under the scheme for profit-linked income tax deduction, carpet area will now be counted instead of built up area of 30 and 60 square metres The time frame for completion of such units was also increased from within 3 years of approval to 5 years.”