The reputed real estate players in the country have welcomed the tax benefits and exemptions announced in the Interim Budget of this year. The interim Finance Minister Piyush Goyal has proposed a slew of measures which are likely to boost the realty demand, potentially in the affordable segment.
The proposal to extend the benefits under Section 80-IBA of the Income Tax Act for one more year would be a boost for the affordable housing segment. Also, the housing projects registered under the Real Estate Regulatory Act by March 31 next year would come under its horizon. R.K. Arora as the Chairman of Supertech expressed his view on this, "The move would bring a much-needed breather for some projects which have struggled to complete for various reasons."
Sangeeta Prasad as the MD & CEO of Mahindra Lifespaces was quoted saying, "We welcome the government's focus on growth via Union Budget 2019-20, which meets multiples objectives including boosting consumption, strengthening the agriculture sector and reducing the urban-rural gap through infrastructure. The progressive budget places a strong emphasis on affordable housing by granting a year's extension on benefits under Section 80 - IBA, to housing projects approved till 31st March 2020, and can be termed as a game changer both for the unorganized sector and middle-income segment. The exemption on notional rental income from second self-occupied homes is an enabler to bolster home buying. The rollover of capital gains tax on the sale of houses has been increased from 1 to 2 houses and thus incentivizes homebuyers and investors. Finally, tax rebate on income up to Rs 6.5 lakh under 80C will accelerate investment in housing."
"This year's Union Budget will positively impact real estate sector as the sales will potentially increase. The current tax law allows an individual to save tax on LTCG (Long-Term Capital Gains) arising from the sale of a house by investing the capital gains in only one new house property. Once the Parliament passes the budget proposal, the taxpayer can save tax by investing the gains in two residential house properties," as quoted by Hari Mohan Sharma, Director Strategy, clicbrics.com.
The announcement included the extension of the exemption period for levy of tax on notional rent on unsold inventories to two years. The owners of unsold inventory are currently exempted from paying income tax on notional rent for one year. While highlighting the same point, Niranjan Hiranandani as the President of the National Real Estate Development Council (NAREDCO) said, "The Minister has proposed extending the period of exemption from levy of tax on notional rent, on unsold inventories, from one year to two years. This will be applicable from the end of the year in which the project is completed, and this will ensure that the slowdown in the creation of fresh stock as a result of the previous situation will be positively impacted."
The CMD of NBCC Anoop Kumar Mittal said, "The government's endeavor to significantly reduce the tax burden on home buyers is highly commendable".
"The budget has taken a good step in increasing disposable income of middle class by making changes like increasing the basic exemption limit to Rs. 5 lakh, increase in the standard deduction and increase in the deduction for interest income," said Dhaval Shah, Joint Managing Director at Parinee Group.