The Budget 2019-20 has just come out and those who seem to be benefitting the most are real estate developers and potential home buyers. The interim Finance Minister Piyush Goyal has introduced a number of reforms that may result in a commendable shift in the industry. These reforms include exempting tax limit for home buyers having two properties as well as tax deducted at source (TDS) on house rent. Let\u2019s take a closer look at the interim budget and the impact it will have on the real estate sector and homebuyers.<\/p>\n\n\n\n
The latest income tax exemption will be a boon for those with an annual income of over 6 lakhs \u2013 they will be able to save north of Rs. 28,000. If one household has two earning members, then they\u2019re annual savings will amount to Rs. 56,000. This, in turn, can result in a huge boost for the affordable housing sector. The reason being, loans for affordable housing<\/a> are usually for 10 lakhs with an EMI of Rs. 10,000. First time home buyers who fall into this tax bracket will be able to buy or invest in a superior home<\/a> with their higher savings.<\/p>\n\n\n\n Thanks to the\nBudget 2019, the government has announced there will be an extension of the\nbenefit under Section 80 IBA for another year. The extension means all housing\nprojects will be approved till 31st March 2020. This move is a massive push for\ndevelopers and homebuyers in the affordable housing segment as it helps achieve\nIndia\u2019s Housing for All initiative.<\/p>\n\n\n\n Investors and homebuyers used to shy away from the thought of buying a second home<\/a> as the rule was they would be taxed on the notional rent income from their second property. This rule was irrespective of whether or not their property was on rent. However, the Budget 2019 has now proposed that income tax will not be levied on notional rent on a second self-occupied property. This exemption is likely to attract many more investors in the residential sector. <\/p>\n\n\n\n One of the\nbiggest problems real estate developers faced was unsold inventory and notional\nrent on the same inventory. If the unsold inventory is at least a year old,\nnotional rent was levied, as was the norm. However, thanks to the Budget 2019,\nrealty players can breathe a sigh of relief as this period has been extended to\ntwo years, beginning from the end of the year the project was completed in. <\/p>\n\n\n\n Prior to the\ncurrent budget, homeowners could save their capital gains on properties sold by\nreinvesting that amount into another property. However, the budget and tax\nguidelines did not allow homeowners to invest this amount in two separate\nproperties. But with the release of Budget 2019, the rollover of capitals gains\nhas been increased to two residential properties. This new move comes under\nSection 54 of the Indian Income Tax Act and applies to taxpayers who have\ncapital gains up to Rs. 2 crores. However, it is important to note that this\nbenefit can be availed only once in a lifetime. Real estate players believe\nthis benefit will create more demand and spark more interest in the Indian real\nestate industry. <\/p>\n\n\n\n With the new Budget 2019, the government has also announced that Rs. 19,000 crores will be pushed towards the Sadak Yojna scheme with the aim to fuel the futuristic vision of boosting physical and social infrastructure. The budget also speaks about housing under the Pradhan Mantri Awas Yojna (PMAY) scheme<\/a> and an increase in development of infrastructure. The positive nod these schemes have received bode well for the future of Indian realty as it will enable more people to invest in or buy homes within the city and in the outskirts as well. <\/p>\n\n\n\n The Budget 2019\nhas also announced that tax on rental income will be increased from the\nprevious limit of Rs 1.8 lakhs to the current amount of Rs 2.4 lakhs. Indian\nrealty players believe this will encourage more investors and homebuyers to\nlook at second homes for rental income. <\/p>\n\n\n\n The Budget 2019 has introduced several new trends that will guarantee a boost for India\u2019s real estate industry. These new benefits are a definite sign for potential homebuyers to invest in Indian realty in 2019<\/a>. Not only will builders and developers benefit, but homebuyers and investors as well. If the new budget has encouraged you to think about buying or investing in Indian real estate then head over to Casagrand<\/a> to find your ideal home. <\/p>\n","protected":false},"excerpt":{"rendered":" The Budget 2019-20 has just come out and those who seem to be benefitting the most are real estate developers and potential home buyers. The interim Finance Minister Piyush Goyal has introduced a number of reforms that may result in a commendable shift in the industry. These reforms include exempting tax limit for home buyers […]<\/p>\n","protected":false},"author":1,"featured_media":40173,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[249,522],"tags":[284,311,530],"class_list":["post-40172","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-industry-trends","tag-buying-new-property","tag-nri-investment","tag-impact-of-budget-on-real-estate"],"acf":[],"yoast_head":"\nBenefits extended to affordable home developers and\nbuyers<\/strong><\/h2>\n\n\n\n
Exemption of tax on notional rent<\/strong><\/h2>\n\n\n\n
Extension of period of exemption<\/strong><\/h2>\n\n\n\n
Capital gains benefits<\/strong><\/h2>\n\n\n\n
Emphasis on the growth of infrastructure<\/strong><\/h2>\n\n\n\n
Increased TDS on rental income <\/strong><\/h2>\n\n\n\n