The interim Union budget placed before Parliament by Minister Piyush Goyal has real estate-specific proposals, which are of job generation potential.
They include waiver of income tax on notional rent for constructed flats remaining unsold allowed up to 2 years from the present one year; the last date of the year of construction being the effective date.
Tax waiver for rental income up to ₹2.40 lakh.
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Tax exemption for profit up to ₹5 lakh, including a second home.
One-time capital gain on sale of residential property to the extent of ₹2 crore - made applicable from one house to two houses.
100% deduction of profits allowed for arriving at the income for tax purposes by realty companies undertaking development of affordable housing projects.Extension of benefits under GST for home buyers will be referred to a Group of Minsters and their recommendations will be considered by the GST Council.
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The budget can be considered buyer friendly as far as real estate is concerned.
Coupled with the above, the following tax relief measures are included in the budget for easing the cash crunch being felt by the ‘aam admi’ due to higher tax liability.
No income tax will be levied for income up to ₹5 lakh.
Standard deduction has been raised from ₹40,000 to ₹50,000.
Tax Deducted at Source (TDS) is waived for interest on deposits with banks and other specified institutions up to ₹40,000.
Additional deduction of premium paid for health insurance has been allowed up to ₹25,000 and another ₹25,000 for insurance cover to parents.
Tax rebate has been increased from ₹2,500 to ₹12,500 under sec. 87 A of the IT Act.
All the above measures will generate more cash with citizens which can be used for further investment like a second house and reap tax benefits.