{"id":690,"date":"2019-07-05T18:16:18","date_gmt":"2019-07-05T12:46:18","guid":{"rendered":"http:\/\/www.orionrealtors.com\/blog\/?p=690"},"modified":"2023-09-15T13:00:56","modified_gmt":"2023-09-15T07:30:56","slug":"budget-2019-boost-to-realty","status":"publish","type":"post","link":"https:\/\/www.orionrealtors.com\/blog\/budget-2019-boost-to-realty\/","title":{"rendered":"Budget Boost to Realty: Tax Holiday for Affordable Housing & Push to Rental Housing"},"content":{"rendered":"\n

FM announced a tax holiday on profits earned by developers of affordable housing.<\/strong><\/em><\/p>\n\n\n\n

NEW DELHI: Trying to provide a further impetus to the ailing housing sector, Finance Minister Nirmala Sitharaman on Friday allowed an additional deduction of up to Rs 1,50,000 on interest paid on home loans borrowed up to March 31, 2020 for purchase of an affordable house valued up to Rs 45 lakh. This will be in addition to the existing interest deduction of Rs 2 lakh, the FM said in her Budget speech.<\/p>\n\n\n\n

With this, a person purchasing an affordable house will now\nget an enhanced interest deduction up to Rs 3.5 lakh, Sitharaman said in her\nBudget speech. This move is expected to translate into a benefit of around Rs 7\nlakh to middle-class homebuyers over their loan period of 15 years.<\/p>\n\n\n\n

In order to align the definition of affordable housing<\/em><\/strong><\/a> in the Income-tax Act with GST Act, the Finance Minister proposed to increase the limit of carpet area from 30 square meters to 60 square meters in metropolitan regions and from 60 square meters to 90 square meters in non-metropolitan regions. Sitharaman also proposed to provide the limit on the cost of an affordable house at Rs 45 lakh in line with the definition under the GST Act.<\/p>\n\n\n\n

For realization of the goal of Housing for All and\naffordable housing, the FM announced a tax holiday on profits earned by\ndevelopers of affordable housing.<\/p>\n\n\n\n

Among other measures announced to lift housing sectors, the\nFinance Minister shifted the base year for holding period to calculate\nlong-term gains from immovable property to 2001 from 1981. The holding period\nfor calculating long-term gain on immovable property was reduced from 36 months\nto 24 months, while a safe harbour of 5 per cent on stamp duty value was\nprovided for the purpose of computation of capital gains on immovable property.<\/p>\n\n\n\n

In a move to promote rental housing, the Finance Minister\nsaid several reform measures would be taken up to promote rental housing.\n“The current rental laws are archaic as they do not address the\nrelationship between the lessor and the lessee realistically and fairly. A\nModel Tenancy Law will be finalized and circulated to the states soon,”\nshe said.<\/p>\n\n\n\n

KEY HIGHLIGHTS<\/strong><\/p>\n\n\n\n