INDIA’S 2020 BUDGET TO BOOST REAL ESTATE

Posted by Mohit Bharatiya on January 18th, 2020

India’s budget 2020 would help improve the cost of housing in the context of global events. The budget proposed by the government of India is to help improve and sustain the real estate industry and other sectors too. This would include evaluating the current issues present and developing solutions to solve problems. It is stated that the 2020 budget would influence a hike in tax breaks for house property income, which in return will boost the real estate sectors. The higher the tax break on financing cost promotes India’s housing sectors in par to housing sectors in developing countries around the world.

The common man in India expects a lot from the government of India when it comes to the upcoming budget plan, most importantly when it has to do with taxation on housing sectors. House owners expect relief in tax on houses in the upcoming 2020, budget. Although, the last few budgets have been proposed in ways that would help benefit the housing sectors. The government of India has initiated the 2020 budget plan so as to help promote the idea of Housingforall, which is expected to transform the housing sectors by 2022.

The newly launched Housingforall website is to boost the real estate industry in India. Also, to make it beneficial for common people to purchase houses, owners to have a break in housing taxation, and for real estate developers to be able to initiate purchase more efficiently. All this has been taken into consideration, to be applied before the budget is declared for execution. Several recommendations have been suggested so as to help ease the burden of homeowners and potential buyers, which in turn can help the difficulties in the real estate sectors in India.

As per the Income-tax Act, in relation to any rented house property, the net annual value of the house property is done by deducting the municipal taxes paid from the total rental value. From that net annual value, a standard deduction of 30 percent is made towards repairs cost and also maintenance costs of the house along with a deduction for interest paid on housing loan which would determine the tax income that is received from the house property.

The standard deduction for housing properties is 30 percent, which hasn’t been increased since 2002. Increasing the deduction to at least 50 percent in view of inflation could be initiated by the government of India for the cost of repairs, utilities, and maintenance of homes.

The impact that these changes would provide In view of the real estate sector, which has been facing a big crisis in the last 3 to 4 years. The house properties market values have remained consistent. The real estate is currently struggling to come out of these difficult situations, so many reasons as to why the real estate sector in India is not so attractive for investment. It would benefit the sectors if attractive tax incentives are declared on housing property income. This would stimulate demand in real estate again, and help boost the real estate sector. Overall, it would also boost the economy.