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Budget and its impact on Realty

May 23, 2019

Undoubtedly, the Indian economy is one of the fastest growing economies in the world and the realty sector contributes a significant portion to the GDP. The recent interim budget 2019 has addressed several challenges faced by this sector. Many of these pertain to taxes, funding and liquidity, rental housing and project approvals. Enlisted below are some of the highlights of the Union & State Budget 2019.

Highlights of Union Budget 2019 – Real Estate


  • The Govt. has proposed tax sops that may motivate people to buy a 2nd house
  • Individuals who own up to two self-occupied properties do not have to pay any tax
  • TDS threshold for deduction of tax on rent has been proposed to increase
    from Rs1,80,000 to Rs 2,40,000
  • No tax charges for two years on notional rent with regards to unsold properties
  • The Govt. has also proposed rollover of capital gains up to `2 crores towards buying (investing) two houses compared to only one under the present one unit only
  • 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 to the housing projects approved till 31st March 2020

Highlights of State Budget 2019 – Real Estate


  • Whitefield, an emerging micro market in Bengaluru, received an infrastructure upgradation from the budget
  • Provisions to improve 14 roads connecting Whitefield have been proposed 
  • Recommendations to GST council for reducing GST rates for home buyers
  • Full Tax rebate up to `5 lakh annual income after all deductions
  • Tax exemption on second self-occupied house
  • Ceiling Limit of TDS u/s 194A has increased from Rs10,000 to Rs 40,000
  • Ceiling Limit of TDS u/s 194I has increased from Rs 180,000 to Rs 240,000
  • Capital Tax Benefit u/s 54 has increased from investment in one residential house to two residential houses

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