Rental income threshold raised, notional rent rules changed.
Buyers as well as sellers of real estate have reason to be happy with the NDA government’s final Budget of its term.
A notional rent is 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.
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.
“I propose to exempt the notional rent applicable on the second self-occupied house,” said Finance Minister Piyush Goyal.
Home owners, who have been earning rental income too have something to cheer about. The threshold limit for TDS on rental income has been increased to Rs 2.4 lakh from Rs 1.8 lakh currently.
Goyal’s Budget had good news for those looking to sell houses too. 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. The Budget has proposed to provide the benefit of rolling over capital gains if the investment is made in not just one, but two residential houses. “This benefit would be offered for an amount of upto Rs 2 crore. It is a once in a lifetime benefit,” said Goyal.