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The Union Budget 2019 has been announced and the real estate experts believe that it has some good news for the real estate players, particularly in the affordable housing sector. The real estate industry was suffering from low demand over the last few years. After the government introduced certain reform policies, the real estate sector slowed down to a certain extent. However, it is on the path of recovery with the sales figures increasing in 2018. With the Union Budget 2019 being announced, the industry is likely to get a boost, as several norms have been declared in favour of the property buyers and sellers. It will bring a relief to the real estate industry, that had been experiencing low sales. Certain companies have already been listed and some of the reputed real estate developers will be benefiting from the norms.
The Finance Minister announced the Budget, where it is evident that the buyers will be having more money in their hands. For people with an income of more than 6 lakhs, the income tax exemption will help to save more than INR 28, 000 annually. In case a household has two family members, the annual savings are likely to increase by INR 56,000. This will come as a boost to the affordable housing sector, where the buyers take a loan of around INR 10 lakh and need to pay an EMI of INR 10,000. With the new tax norms coming into play, people will be able to make a greater amount of saving. This will help them to have more money in their hands.
The Union Budget 2019 also has certain norms, that will extend the benefits of affordable home buyers. In order to make the homes available as per the affordable housing scheme, the government has decided to extend the benefits of the Income Tax Act, Section 80-IBA for one more year. This will cover all the real estate projects that have been approved till the 31st of March, 2020.
The property owners will also benefit from the exemption of tax imposed on Notional Rent. Previously, investors used to remain away from the real estate market, as they had to pay a tax on the notional rental income, generated from second homes. Regardless of whether or not they rented out the property, this tax had to be paid. As this exemption has come into force, the real estate industry is likely to attract more investors and this will benefit the overall health of the industry.
Previously, it was possible for homeowners to save the capital gains tax on a property that was sold, when they reinvested the amount in another property. They were not allowed to make the investment in two properties. However, this benefit has been extended to two residential houses for a person, and this is applicable for tax payers with capital gains up to INR 2 crore.
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