Interim Budget 2019 impact on real estate
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.
Sachin Bhandari, CEO, VTP Realty explained that the government also announced a series of benefits including the exemption of notional tax that is applicable to the second house if someone has more than one house. For homeowners who are earning rental income, the threshold limit for TDS has been increased to Rs 2.4 lakh from Rs 1.8 lakh currently, which is a welcome move.
He further went on to add that the capital gain benefit under Sec 54EC has been doubled to Rs 2 crore and can be deployed in two houses. The decisions are focused on unsold inventories and pushing demand in the real estate sector. In addition to this, the Government announced that until the year 2020, affordable housing projects will be given tax exemptions if registered before 31st March, 2020, which is also a good sign for the sector.
Individual taxpayers having taxable annual income up to Rs 5 lakh will get full tax rebate and therefore will not be required to pay any income tax.