‘Affordable housing' a good Budget takeaway for
Emphasis in the Union Budget on ‘affordable housing'
a welcome theme for the State, says Mr Sherry Oommen,
leading tax counsel and tax policy expert.
He cited the enhancement of investment-linked incentive
for affordable housing to 150 per cent of Capex from
current 100 per cent.
Extension of interest subvention for housing loans up to
Rs 15 lakh where cost of house does not exceed Rs 25
lakh by another year is also positive move.
However, the increase in the service tax and excise duty rates would increase
the overall construction costs as well as commercial rentals, Mr Oommen said.
Adding to this is the proposed levy of service tax on residential complexes
having more than one residential unit as against the earlier levy of more than
This is really going to hit the middle-class Keralites who construct houses as
two or more residential units.
This is usually done with the purpose of letting out the additional unit with
the intent of earning some additional income by way of rent.
While the objective of introduction of negative list of services was to avoid
confusion, the Government would need to reflect on whether this stated objective
Apart from the negative list, there is a declared list of services, services
specifically included, services specifically excluded and a mega exemption
Further the scope of levy of service tax on recipient of service has been
widened drastically, Mr Oommen observed.
Literally every business entity, small, medium or large, would now have to
register with the service tax department and pay tax.
The result is higher compliance costs and increased litigation, he added.
The underlying motto of the Budget 2012 is “give one and take back 10”.
Arguably, the planned revenue loss of Rs 4,500 crore on the direct tax proposals
is clearly sought to be recovered back tenfold via indirect taxes, Mr Oommen
Hindu Business Line, India, dated
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