The interim budget 2019 has focused on three main elements that are farmers, the urban middle class and on real estate. Budget 2019 presented by the Government of India has thrown a ray of positive light on the real estate sector this time with many benefits such as tax exemption reforms and an income tax rebate for a second home. This proves that potential home buyers are going to be the biggest winners of this year`s budget. The Government has tried to boost sales of second homes by relaxing the norms for genuine occupiers who already have a home. For self-occupied second homes, consumers do not have to pay tax on rental income. These initiatives are improving end users demand towards real estate, bringing a big relief for developers in between the current demand and liquidity slowdown. Budget 2019 will help push for affordable housing and infrastructure along with the promotion of rental housing. Budget 2019 has made a number of positive changes for real estate investors.
Tax exemption on rotational rent
The majority of the real estate investors and home purchasers are hesitant to make a second investment for the most part in light of the expense charged on the notional rental pay from their second home. The standard was applicable regardless of whether the residential property was leased or not. But, the interim budget 2019 has rejected this rule by exempting the duty of income tax for notional lease from the secondary self-occupied property. Because of this, the Indian real estate industry is certain to observe a spike in the number of second-time real estate investors.
Section 54 Benefits
Section 54 of the IT act, 1962 allows you to take the benefit of the exemption on long term capital gains tax on the sale of your first property if the proceeds are to be used for the purchase of a new house. If you plan to construct a new house, the construction should be completed within 3 years of the sale of the old house property. Section 54 will only be beneficial if the purchase of a new house is done up to 1 year before or up to 2 years after the previous property is sold. Budget 2019 has permitted the rollover advantage of capital additions u/s 54 and has been expanded from an interest in one residential house to two residential houses if the person has capital gains of up to Rs. 2 crores. Anyway, this advantage is accessible just once in the investor`s lifetime.
Increased benefits for affordable housing segment
One of the striking features of Budget 2019 is the expansion of Section 80 IBA of the Income Tax by one year. Along these lines, all the lodging ventures affirmed till March 31, 2020, will profit by this expansion. This is an incredible bit of leeway for homebuyers who are searching for affordable home choices. Boosting the affordable housing fragment, thus, makes the Government`s housing for all activity an excellent achievement.