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The interim Budget 2019 announced recently has a number of reasons to make real estate investors happy. The sector, which had been experiencing a sluggish growth over the last couple of years, is likely to get a new lease of life, with the new tax norms coming into play. Most importantly, the individuals with an income up to INR 5 lakhs can get a tax relief. Besides, an exemption has been announced on the notional rent from second self-occupied properties. The benefits of rollover on capital gains have been extended to INR 2 crore and the number of residential homes eligible for this benefit has been increased to two from one. All these moves will benefit the real estate sector in the coming months. In the last few days, experts have carried out a lot of discussion and analysis on the impact of these changes. You must be willing to know the impact of these changes from a larger perspective, and how this will impact the tax system in the years to come.
The Budget has recognized some of the important societal changes in the process of living and working of the people. The notional rent has been exempted on second self-occupied this indicates an increment in internal migrations and the necessity for many people to have second homes, so that they can support parents or children who stay in other places. The taxpayer has been permitted to roll over the gains on selling a house by making investment in two houses. This is also an effect of this recognition.
The real estate sector has witnessed substantive changes and an extension has been made for the tax holiday for affordable housing projects. The taxing notional rent of unsold inventory has been modified and this provision is applicable to properties that remain unsold for two years after a project is completed. This, in turn, reflects the importance that the real estate sector careers. Presently, a number of investors are buying real estate in India, as the returns seem to be promising in the coming years.
The budget has also pointed out to the importance of technology. The tax base has been expanded and the overall experience of the taxpayers has been improved.
It is evident that the real estate industry will benefit from the new tax norms. As the homeowners will not have to pay tax for a higher amount on income generated through rent, a greater number of people will be interested in renting off their homes. In the process, the number of people buying homes for commercial purposes will be increasing. The real estate sector will get a boost and the overall health of the industry will improve in the coming years.
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