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Interim budget 2019: Benefits for Home Buyers

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Interim budget 2019: Benefits for Home Buyers

Last updated: February 24 2019
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  • #11

    #11

    Re : Interim budget 2019: Benefits for Home Buyers

    Budget 2019: No income tax on notional rent on second self-occupied house

    The second house will be considered as a 'self-occupied' house and no income tax will be levied. ETRealty | February 01, 2019, 14:13 IST



    NEW DELHI: The interim finance minister Piyush Goyal has proposed to exempt levy of income tax on notional rent on a second self-occupied house.

    "Currently, income tax on notional rent is payable if one has more than one self-occupied house. Considering the difficulty of the middle class having to maintain families at two locations on account of their job, children’s education, care of parents etc," said Goyal.

    It means if a person has three house houses, out of which he/she lives in one and the other two are not given on rent, then the third one will be considered as deemed to be let out and taxed accordingly.

    The second house will be considered as a 'self-occupied' house and no income tax will be levied.

    According to Poorva Prakash, senior director, Deloitte India, this will be a "big boost to housing sector as no notional taxation on second house purchase."








    https://realty.economictimes.indiati...house/67790542
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    • #12

      #12

      Re : Interim budget 2019: Benefits for Home Buyers

      Budget 2019 hikes TDS limit for rent paid by non-individuals, move to help rental income earners

      ​​This limit has now been increased to Rs 2,40,000 per annum. Essentially, this gives tax-related convenience relief to those who depend on rental income.ET Online | February 01, 2019, 15:05 IST




      Benefiting landlords who rent out their houses, Budget 2019 has increased the limit for TDS on rent paid to them by non-individuals i.e corporates etc. Earlier non-individuals (e.g corporates etc) who rented out houses had to deduct TDS if rent paid was more than Rs 1, 80,000 per financial year.

      This limit has now been increased to Rs 2,40,000 per annum. Essentially, this gives tax-related convenience relief to those who depend on rental income.

      For example, if TDS was deducted but the receiver’s income was otherwise below taxable limit or the receiver had invested in tax saving instruments and could nullify tax liability by claiming rebates then he/she would have had to claim refund of the TDS.

      The raising of the limit to Rs 2,40,000 means that TDS has to be deducted only when rent crosses this limit per fiscal.

      As per the Income Tax, any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of—

      (a) two per cent for the use of any machinery or plant or equipment; and

      (b) ten per cent for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings:

      Provided that no deduction shall be made under this section where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the aforesaid person to the account of, or to, the payee, does not exceed Rs 1,80,000.

      Provided further that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such income by way of rent is credited or paid, shall be liable to deduct income-tax under this section.

      Provided also that no deduction shall be made under this section where the income by way of rent is credited or paid to a business trust, being a real estate investment trust, in respect of any real estate asset, referred to in clause (23FCA) of section 10, owned directly by such business trust.

      For the purposes of this section, (i) "rent" means any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any,—(a) land; or (b) building (including factory building); or (c) land appurtenant to a building (including factory building); or (d) machinery; or (e) plant; or (f) equipment; or (g) furniture; or (h) fittings, whether or not any or all of the above are owned by the payee;

      (ii) where any income is credited to any account, whether called "Suspense account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.









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      • #13

        #13

        Re : Interim budget 2019: Benefits for Home Buyers

        Budget 2019: LTCG from sale of house can be invested in two houses

        As per the current income tax laws, an individual can save tax on LTCG arising from sale of house by investing the capital gains in one new house property.ET Online | February 01, 2019, 15:10 IST




        Interim Finance Minister Piyush Goyal in his Budget 2019 speech has proposed to increase the benefit of long-term capital gains (LTCG) arising from sale of house to two residential houses instead of one currently.

        As per the current income tax laws, an individual can save tax on LTCG arising from sale of house by investing the capital gains in one new house property. However, once the budget proposal is passed by the Parliament, this would mean that a taxpayer can save tax by investing the gains in two residential house properties.

        This benefit comes with a catch. An individual can avail this benefit only if capital gains arising from sale of residential house property does not exceed Rs 2 crore and can be availed once in a life time.

        Shalini Jain, Partner, EY India says, “It can further be simplified with an example as follows. Suppose, you sold a house which led to the long-term capital gains of Rs 1 crore. To save income tax on LTCG from sale of house, you will be able to invest the capital gains of Rs 1 crore for buying two houses instead of one currently. Remember this benefit is available only once in a lifetime.”

        Currently, an individual can save tax on LTCG from sale of house property by investing in another house property or by constructing another house or by investing the gains in 54EC capital gains bonds.

        To save tax on LTCG, an individual is required to purchase a house within two years after the date of sale or construct the house within three years after the date of sale. If an individual does not wish to purchase/construct a house, then he/she can invest it in 54EC bonds within 6 months from the date of sale.

        Budget 2017 has reduced the holding period to two years for capital gains to qualify for the long-term. In Budget 2018 has increased the holding period of 54EC bonds to five years and restricted the definition of capital asset to only land and building.













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        • #14

          #14

          Re : Interim budget 2019: Benefits for Home Buyers

          Budget kept its focus on rural, SMEs and middle-class households: Navneet Munot, SBI Mutual Fund

          While this is an interim budget and the actual realization of the visions (such as the changes in direct taxes in favour of the middle-class) will have to wait till the roll-out of the full budget post the general election, it does set a narrative.ETRealty | February 01, 2019, 15:45 IST


          BY: Navneet Munot, Executive Director & Chief Investment Officer, SBI Mutual Fund

          Budget 2019-20 is staged against the backdrop of compulsions of pre-election spending but a challenging revenue situation, primarily emanating from the required GST buoyancy. Deflation in food prices and mounting agriculture debt has highlighted the accentuating farm distress. Further, the thrust on infrastructure spending over the last few years (particularly on road, railways, housing, urban development) had just started to bear some result. Against this backdrop, the government had eventually sided with a marginal glide path on fiscal consolidation. Fiscal slippage in 2018-19 was limited to 10bps and revised deficit estimate is pegged at 3.4% of GDP. FY20 fiscal deficit is also pegged at 3.4% of GDP.

          As expected, the budget kept its focus on rural, small and medium enterprises and middle-class households. While this is an interim budget and the actual realization of the visions (such as the changes in direct taxes in favour of the middle-class) will have to wait till the roll-out of the full budget post the general election, it does set a narrative. Some of the rural oriented schemes such as PM Kissan Samman Nidhi and Mega pension scheme are expected to be rolled out in FY19 itself and have seen the provision in FY19 revised estimates figure.

          The earlier years of the current national government were focussed on addressing the bottle-necks of growth. Consequently, we saw the taxation reforms, banking sector reform, real-estate reforms, e-auction of natural resources, reduced time-lines in obtaining the business clearances, bringing the parallel economy into the mainstream, a drive towards implementation of Aadhar and financial inclusion.

          These reforms yielded visible gains in terms of formalization, digitization, financial inclusion and lower inflation. Yet, for a variety of reasons, the reforms are yet to translate into a higher income gains. The rising inequality and the unique nature of a large un-organized sector in the Indian economy make it imperative for a government to not only worry about the overall growth and reforms but the distributional aspects of growth i.e. a more equitable growth.

          India is flirting with its own version of Universal basic income and social sector benefits. Some of the measures such as health insurance scheme, guaranteed income for small and marginal farmers, and mega pension schemes work towards providing a social security net and enhance the demographic potential of the economy.

          Coming to the markets, the thrust towards income enhancement is positive for the consumption oriented sectors. The bond market will have to grapple with the resultant higher market borrowing. The bond market is faced with a mix of push and pulls factors.

          While the extremely muted headline inflation, stable external account dynamics and dovish bias in key global central banks augur well for the Indian debt market, the high gross market borrowing and the large emphasis on off budget borrowing requirement would prevent a material rally in the yield.

          From equity market perspective, budget would be seen as a positive event given the continued focus on income enhancing measures. Market’s focus will shift back to global cues, political developments and earnings trajectory.

















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          • #15

            #15

            Re : Interim budget 2019: Benefits for Home Buyers

            Budget 2019: Realty shares surge on tax exemption on new realty projects

            The Nifty Realty index was trading 1.53 per cent up at 232.05 around 12:23 pm. ETMarkets.com | February 01, 2019, 14:36 IST

            NEW DELHI: Realty shares surged in Friday's afternoon session after the Finance Minister in his budget speech indicated that the Government was planning to reduce the GST burden on home buyers.

            The Finance Minister also announced capital gains of up to Rs 2 crores under section 54 which has been extended to 2 houses. The notional rent on second self-occupied house has been also cut while income tax exemption has also been provided on new realty projects registered up to 2020.

            Shares of Phoenix Mills (up 4.13 per cent), Oberoi Realty (up 2.17 per cent), Indiabulls Real Estate (up 1.77 per cent) and Sobha (up 1.68 per cent) were the top gainers in the index.

            DLF (up 1.40 per cent), Godrej Properties (up 0.90 per cent) and Prestige Estates Projects (up 0.53 per cent) too were trading in the green.

            The Nifty Realty index was trading 1.53 per cent up at 232.05 around 12:23 pm.

            Benchmark NSE Nifty50 index was up 50.65 points at 10,881.60 while the BSE Sensex was up 194.96 points at 36,451.65.

            Among the 50 stocks in the Nifty index, 33 were trading in the green, while 17 were in the red.

            Shares of Vedanta, Ashok Leyland, YES Bank, SBI, ICICI Bank, Axis Bank, ITC, Zee Entertainment, Bharti Airtel and Tata Motors were among the most traded shares on the NSE.













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            • #16

              #16

              Re : Interim budget 2019: Benefits for Home Buyers

              Budget 2019: Affordable housing players to gain

              ​​Among the listed companies, major beneficiaries will be Can Fin Homes, Indo star Capital finance, Gruh Finance and Aavas Financiers. None of the listed real estate companies have a meaningful exposure to the affordable housing.Jwalit Vyas | ET Bureau | February 01, 2019, 15:17 IST

              The Union Budget 2019-20 has given some relief to the real estate industrywhich has been grappling with low demand. Industry experts believe that the budget will benefit the affordable housing segment.

              Among the listed companies, major beneficiaries will be Can Fin Homes, Indo star Capital finance, Gruh Finance and Aavas Financiers. None of the listed real estate companies have a meaningful exposure to the affordable housing.

              More money in the hands of buyers
              The income tax exemption will save over Rs 28,000 annually for a person with income of Rs 6 lakh. With two earning members in the house, the annual savings are likely to increase by Rs 56,000 annually. This will benefit the affordable housing sector where the loans are usually of around Rs 10 lakh and EMI of nearly Rs 10,000.

              Industry experts that ET spoke with said that a portion of higher savings will find a way into the affordable housing sector.

              Benefits to Affordable home buyers extended
              For making more homes available under affordable housing, the benefits under Section 80 - IBA of the Income Tax Act is being extended for one more year, i.e. to the housing projects approved till 31st March 2020.

              Additional boost from exemption of tax on Notional Rent
              Investors used to shy away from property market as they were charged tax on the notional rental income from their second homes irrespective of whether they put the property on rent or not. The exemption on notional rent is likely to attract more investors in the home market.

              Capital gains benefits on selling one property and buying two
              Earlier, a home owner could save the capital gains tax on a sold property by reinvesting the amount into another property. But the guidelines did not allow him to invest the amount into two properties.

              As per the Union Budget 2019-20 ,benefit of rollover of capital gains under section 54 of the Income Tax Act will be increased from investment in one residential house to two residential houses for a tax payer having capital gains up to 2 crore. This benefit can be availed once in a life time.










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              • #17

                #17

                Re : Interim budget 2019: Benefits for Home Buyers

                Budget aims to boost realty with tax exemptions for both homebuyers, developers

                Prospective homebuyers can now buy two separate properties to avail Long-Term Capital Gain Tax (LTCG) exemption on the sale of existing property. However, this can be availed only once in their lifetime. Kailash Babar&Sobia Khan | ETRealty | February 01, 2019, 15:42 IST

                MUMBAI | BANGALORE: The Interim Union Budget for 2019-20 has provided a major relief to both homebuyers as well as realty developers with several measures aimed at lowering their tax incidence and burden. While the government has pushed the affordable housing agenda further, the proposals are also aimed at boosting the housing demand.

                Prospective homebuyers can now buy two separate properties to avail Long-Term Capital Gain Tax (LTCG) exemption on the sale of existing property. However, this can be availed only once in their lifetime.

                Currently, homebuyers are constrained to buy one property of a bigger value to cover up the gains received through sale of existing property to avail this benefit. The finance minister’s proposal would offer flexibility to the homebuyers to split the gains in two properties and still avail the capital gains tax exemption.

                Homebuyers keen on picking up second property for self-usage are also in for an exemption from tax on notional rental income from this property. The move is expected to push the second home or weekend homes market.

                Affordable housing is expected to receive a fillip with the finance minister’s proposed extension of the benefit of 80IBA by one more year. Builders of such projects can now register their projects until the end of financial year 2019-20 as against 2018-19 to avail the exemption from tax on profits from these projects.

                "Budget 2019 positively surprised us with multiple amendments on Real Estate tax provisions. Extending the affordable housing tax holiday will certainly reduce the approval pressure on the developers and increase supply of such homes,” said Bhairav *****, Partner - Real Estate Tax, PwC India.

                Under section 80 IBA of Income Tax Act 2016, developers of projects with houses up to 60 sq meter carpet area get deduction of 100% of profit derived from such business.

                Realty developers can now claim exemption from unsold inventory tax for two years after the completion of their projects as against the current norm of one year. Currently, realty developers are expected to pay tax on notional rent on their unsold inventory after one year of completion of residential projects.

                “The tax relief on the unsold inventory will benefit the builders more especially in the backdrop of large unsold stocks and muted demand. The sales and launch momentum in 2018 was mainly driven by affordable homes and the industryneeds the push to continue as many measures related to affordable homes have been taken by the government,” Shishir Baijal, Chairman & Managing Director, Knight Frank India.

                According to Niranjan Hiranandani, MD, Hiranandani Group, the aspect of tax on unsold inventory has caused a section of real estate developers to slow down on-going projects, as they are struggling with their unsold inventory and the new proposal will give them more time to handle the challenge of unsold inventory.

                However, developers and homebuyers will have to continue waiting for a decision by the group of ministers on reduction of Goods and Services Tax (GST) rate on under-construction properties.

                The Budget also proposed no tax on house rents up to Rs 2.4 lakh as against current limit of Rs 1.8 lakh and this, according to experts, can attract more investors to buy second homes for earning rental income.















                https://realty.economictimes.indiati...opers/67792050



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                • #18

                  #18

                  Re : Interim budget 2019: Benefits for Home Buyers

                  What real estate gained in Budget 2019?

                  Read what interim budget 2019 offered to the India real estate industry.ETRealty | Updated: February 01, 2019, 14:25 IST


                  NEW DELHI: Interim finance minister Piyush Goyal presented the interim Union Budget 2019-20 on February 1.

                  According to Goyal, “We are poised to become a five trillion dollar economy in the next five years and aspire to become a ten trillion dollar economy in the next eight years thereafter.”

                  Here is what real estate gained in budget 2019:

                  1. For making more homes available under affordable housing, the benefits under Section 80-IBA of the Income Tax Act is being extended for one more year, i.e. to the housing projects approved till 31st March, 2020.

                  2. For giving impetus to the real estate sector, FM proposed to extend the period of exemption from levy of tax on notional rent, on unsold inventories, from one year to two years, from the end of the year in which the project is completed

                  3. Currently, income tax on notional rent is payable if one has more than one self-occupied house. Considering the difficulty of the middle class having to maintain families at two locations on account of their job, children’s education, care of parents etc, Goyal proposed to exempt levy of income tax on notional rent on a second self-occupied house.

                  4. The benefit of rollover of capital gains under section 54 of the Income Tax Act will be increased from investment in one residential house to two residential house for a tax payer having capital gains up to Rs 2 crore. This benefit can be availed once in a life time.

                  5. The TDS threshold for deduction of tax on rent is proposed to be increased from Rs 1,80,000 to Rs 2,40,000 for providing relief to small taxpayers

                  6. Individual taxpayers having taxable annual income up to Rs 5 lakh will get full tax rebate and therefore will not be required to pay any income tax








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                  • #19

                    #19

                    Re : Interim budget 2019: Benefits for Home Buyers

                    Proposal of extending tax sops for affordable housing to boost steel demand: AIIFA

                    ​​Presenting the Interim Budget for 2019-20 in the Lok Sabha, Finance Minister Piyush Goyal said benefits under Section 80-IBA of the Income Tax Act are being extended for one more year to housing projects approved till March next yearPTI | February 02, 2019, 08:13 IST




                    NEW DELHI: The government's proposal to extend tax sops given to real estate firms for developing affordable housing until next fiscal will boost demand of long steel products, Secondary steel industry body AIIFA said Friday.

                    Presenting the Interim Budget for 2019-20 in the Lok Sabha, Finance MinisterPiyush Goyal said benefits under Section 80-IBA of the Income Tax Act are being extended for one more year to housing projects approved till March next year. This proposal would boost supply of affordable housing.

                    "The announcements related to developing affordable housing until next fiscal will boost the demand of long steel products like TMT bars etc in the country," All India Induction Furnaces Association (AIIFA) Secretary General Kamal Agarwal said.

                    The government also announced that capital gains of up to Rs 2 crore could be rolled over for investment in two housing units from the current one unit only. It also exempted tax on notional rent on a second self-occupied house.

                    The AIIFA represents electric induction melting furnace industry which produces products like mild steels, low alloy steels and stainless steels, among others.

                    Sponge Iron Manufacturers Association said it sees the Budget as positive step for the welfare of middle income group.

                    "We welcome the Budget. It is a good Budget it will result in an inclusive growth of all industries including sponge iron," its Executive Director Deependra Kashiva said.

                    Material Recycling Association of India (MRAI), which represents over 900 members of the country's ferrous and non-ferrous metals recycling industry, said the government has gone extra mile for the farmers and middle class.

                    "The budget is no doubt a very good one for small scale businesses. Recycling industry is a growing industry in India and players' don't have a big set ups. The wages are also not that high but with the tax relief given, more units will come up," MRAI President Sanjay Mehta said.










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                    • #20

                      #20

                      Re : Interim budget 2019: Benefits for Home Buyers

                      The Housing and Urban Affairs Ministry has received a 17 per cent hike, to Rs 48,000 crores in budgetary provisions in the interim budget 2019. It includes a 25 per cent increase in allocation for metro projects and a five per cent hike towards the PMAY scheme.
                      Last edited February 4 2019, 03:33 PM.
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