The interim budget was presented by interim Finance Minister Piyush Goyal on Friday, 1st Feb and the real estate sector had a huge reason to rejoice as several direct and indirect measures were proposed for the ailing sector.
According to Goyal, “We are poised to become a five trillion dollar economy in the next five years and aspire to become a ten trillion dollar economy in the next eight years thereafter.”
Here is what Real Estate Sector gained in budget 2019:
- For making more homes available under affordable housing, the benefits under Section 80-IBA of the Income Tax Act is being extended for one more year, i.e. to the housing projects approved till 31st March 2020.
- For giving impetus to the real estate sector, FM proposed to extend the period of exemption from levy of tax on notional rent, on unsold inventories, from one year to two years, from the end of the year in which the project is completed
- Currently, income tax on notional rent is payable if one has more than one self-occupied house. Considering the difficulty of the middle class having to maintain families at two locations on account of their job, children’s education, care of parents etc, Goyal proposed to exempt levy of income tax on notional rent on a second self-occupied house.
- The benefit of rollover of capital gains under section 54 of the Income Tax Act will be increased from investment in one residential house to two residential houses for a taxpayer having capital gains up to Rs 2 crore. This benefit can be availed once in a lifetime.
- The TDS threshold for deduction of tax on rent is proposed to be increased from Rs 1,80,000 to Rs 2,40,000 for providing relief to small taxpayers
- Individual taxpayers having taxable annual income up to Rs 5 lakh will get a full tax rebate and therefore will not be required to pay any income tax.
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