Developers may get 10-year tax break on rental housing profits

Finance Ministry has asked builders to submit a note on the rental housing business model The finance ministry may look at a 10-year tax holiday for real estate developers on profits earned from rental housing as it looks to revive investment and boost a slowing economy, sources said. In a recent meeting with senior finance ministry officials, the real estate developers have been asked to suggest steps to address challenges faced by the sector. They have also been asked to submit a note on the rental housing business model, where expenses would be allowed to claim for deduction, but the profit will be exempted from tax for 10 years, sources said. Over the past few years, investments in the country have fallen from 36 per cent of GDP to 29 per cent, and the finance ministry believes that the primary reason for this decline is slowdown in the real estate sector.