The Union Budget 2025 has sought to offer several tax benefits and incentives to homebuyers, thus emerging as a boon for them. From enhancing affordable housing to easing the policies of taxation, the initiatives of the Government of India are all set to have a long-lasting impact on the real estate market in India and the homebuyers. Homebuyers looking to invest in modern-day gated community apartments, such as the gated community apartments in Hyderabad, are in for the time of their lives, all thanks to the new reforms of the Indian Government.
Let us understand all that homebuyers need to know regarding tax benefits and incentives.
Increase in Tax Rebate
One of the most prominent conclusions from the new budget is the increase in tax rebates under the newly passed tax regime. Individuals earning up to INR 12 lakhs per annum don’t have to pay any personal income tax. This is a move that enables such individuals to enhance disposable income, thereby allowing them to save more for housing investments.
Moreover, the simplified tax structure makes sure that middle-class families have more liquidity, resulting in enhanced household consumption, savings and investments in real estate and equity.
With the revised income tax slabs and reduced rates of tax, a rough estimate states that taxpayers could possibly save up to INR 10,000 per month, depending on their income bracket.
Greater TDS Threshold on Rent
The budget 2025 has increased the TDS deduction threshold on rent from INR 2.4 lakhs to INR 6 lakhs per annum. This change has ensured a significant reduction in paperwork and compliance burden on tenants while still ensuring a higher flow of cash for landlords.
Investors can now claim a Nil valuation for two self-occupied properties rather than just one, which is indeed a positive move for residential real estate investment, such as the gated community apartments in Hyderabad or the flats for sale in Vizag.
Formerly, homeowners could claim only one self-occupied property to be tax-free, but right now, they can claim two, thereby eliminating taxation on notional rental income from a second home. This step helps in reducing tax pressures, promotes homeownership and facilitates real estate investment, especially in second homes and Tier 2 and 3 cities.
When it comes to tax benefits for homebuyers, especially middle-class individuals, they can now benefit from better affordability, minimised tax liabilities, and lesser compliance hassles. By simplifying tax rules and financial constraints, the union budget of 2025 has made property ownership and rental housing all the more accessible.
The SWAMIH Fund-2
The Government of India has also announced the SWAMIH Fund-2 to complete 1 lakh homes in stalled projects. The increased allocation to this new fund of INR 15,000 crores for an extra 1 lakh units in Budget 2025 aims to offer relief to thousands of homebuyers whose real estate projects have been stalled or delayed.
The completion of 50K dwelling units under the already existing SWAMIH scheme, with another additional 40K in store, highlights the strong push of the government towards resolving this housing crisis.
The further expansion of this fund is expected to readily improve the supply of ready homes for first-time buyers, stabilize the market, and perhaps make housing all the more affordable. All in all, this fund instills confidence in the real estate sector, assists homebuyers, and carries out the completion of stuck projects, thus reviving the booming real estate market in India.
No Tax on Second Homes
The budget of 2025 eliminates every condition by allowing two properties to be considered self-occupied, thus removing the tax liability on notional rental income. For instance, if you’re looking to purchase one of the gated community apartments in Hyderabad after you already own a property, this is going to be exempted from taxes.
Homeownership has now become all the more attractive as Budget 2025 enables taxpayers to claim Nil valuation for two self-occupied properties rather than just one previously. Formerly, tax benefits were conditional, but now, individuals can invest in second homes without having to worry about additional burdens of tax.
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Key Takeaways
The Union Budget 2025 has introduced significant tax benefits and incentives that make homeownership more accessible and financially rewarding. With increased tax rebates, the exemption of notional rental income on second homes and a higher TDS threshold on rent, homebuyers can now enjoy reduced tax liabilities and enhanced affordability. Additionally, government reforms are set to strengthen the market, which will provide homebuyers with greater opportunities to invest in properties while ensuring financial stability and ease. Take advantage of the budget and buy your dream home from Northstar Homes.
Frequently Asked Questions
The Union Budget 2025 increases the tax rebate which reduces tax burden, thereby enhancing disposable income and making home ownership more affordable for buyers.
First-time home buyers will benefit from increased tax rebates, no tax on second homes and simple tax structures thereby encouraging real estate investment.
The high tax rebates, reduced tax rates and increased affordability make housing more accessible for middle-class buyers by lowering the financial burdens.
In comparison to the previous budgets, homeowners can now enjoy higher tax rebates, exemptions on second homes, increased TDS threshold and enhanced real estate investments.