Expedited approvals from the state government led to a good March closing for most developers in Ahmedabad and Gandhinagar. According to estimates by the Confederation of Real Estate Developers’ Association of India (CREDAI), affordable housing projects worth Rs 1.5 lakh crore were approved in less than a month in the two cities.
With quicker approvals, developers coming up with some 275 projects will be able to avail benefits of Section 80 IBA of the Income-Tax Act (ITA), under which developers get 100% tax exemption on profit.
The Ahmedabad chapter of the developers’ body had recently approached chief minister Bhupendra Patel to get quick approvals for affordable housing projects before the 80 IBA benefits lapsed. The section 80 IBA of the I-T act was introduced to encourage affordable housing so that developers passed on the benefit to customers.
“This benefit was not extended in the budget this year and the last day to avail it was March 31. We met the CM on March 2 and he assured us that approvals for such projects will be expedited. The CM asked top officers to instruct all corporations and urban development authorities to clear all the files received before March 15 through the green channel,” said Tejas Joshi, president, CREDAI, Ahmedabad.
“In less than a month, plans for more than 275 affordable housing projects have been passed in the Ahmedabad Municipal Corporation, AUDA, and Gandhinagar. These projects will result in more than 35,000 new houses,” Joshi said.
Industry players said it takes about two months to pass the plan. However, with expedited approvals, builders may get benefits of around 7% which can be passed on to customers. As builders are set to increase the price by Rs 300-500 per square feet from April 2, this relief can be significant for buyers.
