Real estate sector sees budget boosting consumer sentiment
The realty industry has welcomed the interim budget saying the many tax proposals will give the needed fillip to the sector that has reeling since the past two years with severe liquidity crisis and demand slowdown.
The budget seeks to extend tax sops for affordable home developers and to remove the tax on notional rent for a second housing unit as well as unsold units. It also seeks to extend the benefits under Section 80-IBA of the Income Tax Act for one more year–to housing projects approved till March 2020, which will boost supply of affordable housing.
According to property consultants, there are about 6-7 lakh of unsold units with developers in seven-eight major cities alone.
“The steps taken could percolate into direct & indirect benefits to the housing sector. The impetus on affordable housing was once again visible. I believe the proposal to extend Income Tax benefits for affordable housing schemes coupled with doubling NIL Income Tax slab from 2.5 to 5 lakhs will definitely be an impetus to the affordable housing sector. Also, exemption of tax on notional rent, on unsold inventories up to 2 years would provide relief to the Developers on the short term and help focus on newer projects.” Shared Sankey Prasad, Chairman and Managing Director, Synergy Property Development Services
The benefit of rollover of capital gains up to Rs 2 crore under section 54 of the IT Act will now be available for investment in two houses from the present only one unit. It also proposes to enhance the TDS deduction threshold for rent to Rs 2,40,000 from Rs 1,80,000 now.