The financial budget of 2019 produced by the current finance minister of the country brought about several financial changes in the system. The struggling economic condition prevalent in the country needed oxygen and the budget will give the necessary oxygen to come out of the critical conditions. In this blog, we will be focusing on all the aspects that brought about change in the Indian real estate industry for the time being:
- Increase in standard deduction: The standard deduction increased from Rs 40,000 to Rs 50,000 for the salaried people. The move to increase the standard deduction in what way benefit the industry will see in the future.
- Tax savings up to Rs 10 lakh income: The move will please a lot of people in the higher income bracket. The ministry set up a very complicated calculation under the various acts to give relief to people taking up home loans in their yearly income tax payment. The standard deduction will also relieve a lot of people from their IT burdens.
- Less tax burden: The move was mostly political driven but proved to be one of the biggest highlighters of this year’s budget. The move will please people of various backgrounds and bring back faith in the current government. The lesser tax burden will encourage people to invest in a property thereby giving the industry much needed cash flow.
- No tax on the second house: The moves will arguably the best move to revive the real estate industry. People owning more than one house had to include the income from the other properties in the yearly IT file. The new move will provide an exemption to this group of people. How this move will help the country to move forward we don’t know, but it will please many real estate owners.
- Increase in TDS limit on Interest Earned: The budget increased the TDS limit to Rs 40,000 pa. The move will significantly encourage new people to come into real estate investment.
- Increase in TDS limit on rental income: The move is quite similar to taxation of a second home. The move increased taxation limit of rental income from Rs 1,80,000 to Rs 2,40,000pa.
- Exemption on capital gains tax: Until now, there were certain sets of exemption to avoid capital gains tax. The profits gained from the sale or transfer of immovable property gets invested in one house property; such activities were exempted from taxation. The new 2019 budget allows the seller to invest his profit on two different properties with a maximum limit of 2 crore. A person can enjoy this benefit only once in their lifetime.