The Union Finance Minister Pranab Mukherjee has warned the builders against non-extension of tax holiday benefit to the consumers, stating that if the incentives are not given, as deserved to the customers the government will restrain from providing any such benefits 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," the minister indicated.
"Otherwise, no finance minister will provide them (benefit) in future," the minister confirmed.
The minister also stated that a good businessman is one who would keep his customers happy - "I hope a good sense would prevail on the builders, "he added.
The government has provided a tax holiday to builders with respect to profits on infrastructure projects approved in financial year 2007-08, provided that these projects are completed before March 31, 2012.
Section 80IB (10) of the Income Tax Act has been amended to allow 100 percent exemption on income from housing projects with built up area of 1,000 sq ft (maximum) in Delhi and Mumbai. For other places the area limit is up to 1,500 sq ft.
In efforts to revive the real estate and boost affordable housing, the minister has also announced an interest subsidy of one percent on all housing loans up to Rs 10 lakh (if the market value of the house unexceeds Rs 20 lakh).