Pby paramount IN GENERAL PROPERTY 2021-08-21
The housing sector in the country is slowing coming back on its feet.
One of the policies that have actively contributed to this is the tax benefits given to both buyers and builders.
The government policies have pushed for incentivising property buyers and developers. This has been the case, particularly, for the affordable housing segment. Under the government’s push for affordable housing, the real estate sector has received a 100% tax relief. But that is not all. The sector has also received service tax incentives making it easier for the sector to sustain itself in the long-run. Developers have also been cheered on by getting access to cheaper capital and the infrastructure status rendered upon affordable housing.
The tax incentives have also made life easier for home and property buyers.
First-time home buyers are now allowed to receive tax benefits on the interest as well as the principal amount. They can also claim tax deductions (additional) for an amount up to INR 50,000 in any financial year.
In the 2017 budget, the government reduced the holding period for immovable assets from three to two years. While the long-term capital gain is now taxed at 20% (a concessional rate) relief came in the form of their ability to invest in new residential properties. Then the 2018 budget went a step further by proposing tax relief for property buyers and sellers by capping it at 5% i.e. below the circle rates for calculating the capital gains tax and the stamp duty.
In addition, the funding boost, low-interest subsidy and low ticket home loans, and price waivers and cuts have given the real estate sector a much-needed impetus.
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