Today, taxpayers and property owners are quite upbeat with the updates introduced by the Interim Budget 2019. In the budget speech on February 3, 2019, Mr. Piyush Goyal proposed to exempt levy of income tax on notional rent in case of a second self-occupied property. In addition to this, there’s also a proposal of increasing the threshold of rent payment without TDS. According to the government, such a plan is essentially designed to provide relief to the small tax payers, who need to take pains while paying taxes.
Here’s a look at the three major highlights that are expected to bring benefits to the property owners.
- Notional Rent Exemption on Second Self-Occupied Property
So far, the taxpayers occupying more than one house have to pay tax on notional rent. Needless to say, the tax on the notional rent is quite high and it imposes undue monetary pressure on the taxpayers. You might have a second house in your native place where you don’t live but your parents live. Quite obviously, you never got the rent for that instead you continued paying the notional rent on the second property. However, with the new update, tax payers are now entitled to claim two owned houses as self-occupied, without having to pay any tax on such notional rent, provided the same is/are not let-out.
- Exemption On Long-Term Capital Gains
Following the new update, you can now claim the tax benefits with respect to long-term capital gains on the sale of residential house. However, a tax rebate is only possible if the indexed long-term capital gains are further invested for buying or constructing another residential house, within a stipulated period of time. The interim budget 2019 also proposes to expand this benefit to constructing or buying two residential properties. According to this, a taxpayer can claim an exemption under Section 54, provided the amount of capital gains does not exceed Rs. 2 crores.
- Increase in TDS Limit for Rental Income
The interim budget has also declared an increased limit for rent on which the occupant will deduct tax, before paying the rent to the landlord. However, the present limit of Rs 1.80 lakhs is increased to 2.40 lakhs, beyond which the lessee is entitled to deduct the tax.
The recent interim budget update has put the homeowners on an upbeat mode. However, the real life picture is yet to be envisaged in the following years. If you are now looking to buy any luxury flat near Airport or in any other areas of Kolkata, make sure that you get the benefits of all these updates. The direct advantage for end users today is that they can easily sell their existing homes and look to upgrade to their desired luxury property.