The interim budget for 2019 has had a generally positive impact on all stakeholders in India’s real estate, including home buyers, home owners, developers and bankers.
Here’s a look at how the budget proposals benefit
real estate in India:
- Increase In Standard Deduction
The standard deduction of Rs.40,000 for salaried classes, has been proposed to be raised to Rs.50,000.
- Tax Savings Up To Rs.10 Lakh Income
The salaried class having taxable income up to Rs.10 lakh have the means to avoid income tax by claiming the standard deduction of Rs.50,000, deductions up to Rs.150,000 under Sec 80C for specified savings and home loan repayment, deductions up to Rs.200,000 under Sec 24 towards interest paid on home loan, deduction up to Rs.50,000 under Sec 80D for medical insurance premium paid (for self, spouse, children & parents below 60 years age) and deduction up to Rs.50,000 under Sec 80CCD (1B) towards contribution made to NPS (National Pension Scheme).
- Less Tax Burden
The lesser tax burden can help people invest their savings in property as well as allow them to plan their finances. Paying off higher EMIs is possible, which can in turn ensure higher home loan eligibility.
- Increase In TDS Limit On Interest Earned
The budget 2019 has proposed to increase the TDS limit to Rs.40,000 pa. Before, Tax Deduction at Source was applicable on interest earned beyond Rs.10,000 PA on bank deposits and other investments.
- No Tax On Second House
It was mandatory to pay income tax on the income from house properties, if anybody owned more than one house, other than a self-occupied house. The notional rent and rental income on the second house had to be calculated. The budget 2019 does not levy any income tax on the second house, which will help middle-class families own houses at two locations, whether it’s for taking care of their parents, for their children, for their work or any other genuine reason.
- Increase In TDS Limit On Rental Income
10% of rent, if rental payment exceeds Rs.1,80,000 pa, has to be deducted and paid to income tax. With the budget 2019, the threshold limit on TDS on rental payment has been raised to Rs.2,40,000 pa.
- Exemption On Capital Gains Tax
Until now, there were certain exemptions available to avoid capital gains tax. If profits made from the sale/transfer of residential immovable capital assets are invested in one house property, such capital gains were exempt from income tax. The conditions listed the time period for investing and that the assessee should not own more than one house property at the time of claiming exemption. The budget 2019 has proposed to allow the assessee to invest such capital gains in two different residential properties and claim exemption from the tax. The capital gains should not exceed Rs. 2 crore and such exemption can be availed once in a lifetime.
It’s the best time to invest in the home of your dreams with the budget 2019 helping make purchasing property much easier. If you’re looking for real estate in Mumbai, Mahindra Lifespaces is a renowned developer with great projects in strategic locations.
Mahindra Roots offers 2 BHK flats in Kandivali East.
Reference:
1. The Hindu - Effects on real estate in budget 2019
2. 99acres - Impact of budget 2019-20 on the real estate sector
3. Proptiger - Real estate sector reaction union budget
4. Image Source - freepik.com/free-photo/female-hand-operating-calculator-front-villa-house-model_1193201.htm
