In a bonanza for the country’s real estate sector in an election year, the government had surprises in store for buyers and sellers in the real estate sector.
Taking the place of an ailing Arun Jaitley, in his 100-minute speech, for giving impetus to the real estate sector, Piyush Goyal proposed a notional rent, which will be applicable to the second house if someone has more than one house, has been waived off, considering the needs of citizens who migrate to for job opportunities, as well as those who have to maintain two houses for family reasons.
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Previously, somebody who had two houses had to pay a tax on the notional rent even if the second house was not rented out. So somebody whose second house was being occupied by immediate family or parents, would still end up paying tax on notional rent though he was not earning any income from that house.
Finance Minister Piyush Goyal also proposed to increase tax deducted at source (TDS) limit on rent income to Rs 2.4 lakh from the current Rs 1.80 lakh. Goyal also had good news for those looking to sell houses. Earlier, a person who purchased a new residential property using the proceeds from the sale of another residential property would be exempt from capital gains tax. However, this was applicable only on a single new residential property under Section 54. Goyal also announced the benefit of rollover of capital gains under Section 54 of the Income Tax Act will be increased from investment in one residential house to two residential houses for a tax payer having capital gains up to Rs 2 crore. This benefit can be availed once in a lifetime.