How The Interim Budget 2019 Benefits Homebuyers
Announced in the month of February, the Interim Budget 2019 brought in many promising announcements for homebuyers across India. For one, affordable housing dominated the discourse on the realty market, and several measures to aid homebuyers in this segment were announcement. Moreover, a number of tax concessions were also announced as an effort to revive the realty market.
Here are some announcements made in the Interim Budget 2019 that stand to benefit homebuyers:
- As an attempt to incentivize homebuyers to invest in the sector, the tax benefits as applicable under Section 80-IBA of the Income Tax Act are now being extended for an additional year and will apply to housing projects approved till 31stMarch 2020.
- In keeping with the government’s focus on affordable housing, with the Housing For All By 2022 mission, the proposal to extend tax benefits to the affordable housing sector, along with the doubling of the NIL tax bracket, from 2.5 lakhs p.a. to 5 lakhs p.a., serves as an aid to make housing more accessible.
- It is estimated that there are approximately 6-7 lakhs of unsold housing units across the major cities in India. The Interim Budget has also sought to address this problem. The period of exemption from levy of tax on notional rent, in the case of unsold inventory, has been extended to two years (from one year), starting at the end of the year in which the project is completed.
- The capital gain benefit applicable under Section 54EC has been doubled to Rs. 2 crore and is now applicable to two housing units owned by the same entity. This has given homebuyers further incentive to invest in more than one property, while also addressing the issue of unsold/unoccupied inventory.
- The threshold limit for TDS on rental income has been increased from Rs. 1.8 lakh to Rs. 2.4 lakh, which has been another announcement welcomed by homebuyers in the country. Homeowners with more than one property in their name can now avail an exemption of notional tax on the second residential property as well.
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