Post-Budget reaction By Ramesh Nair, CEO and Country Head, JLL India
New Delhi ,
This is a progressive Budget that has the potential to usher the country into a new phase of development and growth.
The ‘New India Budget’ as we would like to call it, is expected to boost the real estate sector and keep up the pace of development achieved in 2018. This budget is clearly focussed on both homebuyers and developers with unsold inventory, and addresses some of the key pain points of the sector. For affordable housing projects, the benefit under the provisions of Section 80IB-A (100% deduction on gains from these projects) has been extended for one more year, until 2020.
The tax relief on notional rent from unsold stock has been extended to two years. For buyers, no tax on notional rent on second self-occupied home, no TDS on rental income up to 2.4 lac per year and capital gain exemption under Section 54 of Income Tax Act to be available on two house properties, (up to 2 cr) once in a lifetime, will prove to be a big impetus for the sector. Additionally, the general exemption of income tax up to INR 5 lac that will benefit 3 crore tax payers is likely to increase the demand for affordable and mid-income housing segments. Also, the strong signal of rationalization of GST in the near future also augers well for the sector. With these measures bearing fruit in the medium to longer term, we foresee a rise in housing demand in 2019.