Does Budget Incentivise the deal for HomeBuyers!!

One of the key changes this budget has got is an option to forgo tax deduction on Home loan Interest.

On the contrary, big ask from Investor & Real estate community was to enhance the limit of deduction on house loan which now has a ceiling of Rs 2 lacs per PAN no. It is broadly ignored and the limit is increased,  would have encouraged the taxpayers to invest in house properties on loan in a bid save taxes.

Key Benefits @ Budget 2020 in Housing Domain

  • An additional deduction of Rs 1.5 Lacs per annum for affordable houses had a condition for the home loan to be taken on or before 31.03.2020It is no extended by one more year till 31.03 2021. New date as on 31st Mar 2021 also applies for Developers who need to be incentivized for developing the affordable properties for a tax holiday on profits earned on affordable segment. Thus the affordable housing continues to be a focus for large tax-paying section
  • Another important accommodation is towards the income tax provisions on the non-taxable difference between stamp duty value and actual sale price. With many transactions in the last few months taking place below the stamp value which leads to practical issues and unwanted tax issues, it is proposed to increase the variance from erstwhile 5% to 10%

On the contrary, there is another change which is seen detrimental to the old regime is on Fair Market Value Calculation on Old properties.

Fair Market Value(FMV) of the property acquired before April 1, 2001, is an important determinant for capital gains calculation on properties older than 20 yrs.  In a bid to put end to arbitration, it is now proposed that FMV  for properties will not exceed stamp duty value as on Apr1, 2001 in cases where the intention is to take the higher value as the cost of acquisition.

Enhancement in the limit of difference between guidance value & actual sale price is welcomed by the community overall. However, there are higher expectations from home buyers as the average cost of houses in Metros hovers in the range of 60L to 1.5/2 Cr. depending on location and limit on interest on housing loan @ 2 lacs hardly give any coverage to this large section of taxpayers.

Budget being only of the many enablers with Govt of India, Real Estate is one the largest job creation sector is very important strategically and thereby the constituents therein should be heard and incentivized accordingly

Latest Updates

  • Understanding Taxation of Dividends from Shares and Mutual Funds
    Understanding Taxation of Dividends from Shares and Mutual Funds As the deadline for filing income tax returns approaches, clarity on the taxation of dividends received from investments in shares and mutual funds becomes crucial. The rules surrounding dividend taxation underwent significant changes with the Finance Act, 2020, which abolished the Dividend Distribution Tax […]
  • Understanding Capital Gains Tax on Equity and Mutual Funds
    Understanding Capital Gains Tax on Equity and Mutual Funds Investing in equity and mutual funds can significantly enhance your wealth but also entails tax obligations on capital gains. Capital gains tax is levied on the profit earned from selling investments like equity shares or mutual funds at a higher price than their purchase […]
  • The Importance of Verifying Your Income Tax Return
    The Importance of Verifying Your Income Tax Return Filing your Income Tax Return (ITR) is just the first step in the tax process. To ensure your return is valid, you must electronically verify it within a specific timeframe, usually 30 days, as mandated by the Income Tax Department. Verification can be […]
  • How to Check Income Tax Refund Status for 2023-24
    How to Check Income Tax Refund Status for 2023-24 As the deadline for filing income tax returns for the financial year 2023-24 approaches on July 31, many taxpayers are eagerly awaiting refunds on excess taxes paid. If you’ve already filed and verified your returns, you can easily monitor the status of […]
  • Why You Should Verify Your Income Tax Return Within 30 Days of Filing
    Why You Should Verify Your Income Tax Return Within 30 Days of Filing As the deadline for filing income tax returns (ITR) approaches on July 31, taxpayers are busy gathering the necessary documents. Once you’ve filed your tax return, it’s crucial to verify it within 30 days. The Income Tax (I-T) […]