It isn’t a secret that the lengthy lockdown due to COVID-19 had adverse effects on the economy of India. The real estate sector was also affected as it witnessed fallen demand and price growth severely. So, in the quest to tackle economic decline and revive the realty sector, the government made its move.
On 12th November 2020, the Finance Minister Nirmala Sitharaman announced first-time buyer tax relief for both the real estate developers and homebuyers. This declaration can act as a boon to prospective homebuyers, mend the market situation, and help the concerned real estate developers boost their business.
Details of the income tax relief announcement
The income tax relief 2021announcement states that the admissible differential between the agreement value and circle rate has been increased from 10% to 20%. This applies for buyers of new primary residential real estate units of sales value up to Rs. 2 crores. The action is geared towards stimulating demand for the residential realty sector by giving relief to real estate developers and homebuyers.
These relaxations in the Income Tax (IT) rules shall be applicable till 30th June 2021. So, if you are planning to buy a residential property or apply for a home loanfor the same, this is the right time.
Additional Read: Everything You Need to Know About Tax Benefit on Home Loans
Benefits to the homebuyers
Until 12th November 2020, the government excused only 10% differential value between circle rate and market agreement value from the income tax. In contrast, now homebuyers can save income tax on a differential value of 20%. This will ultimately lead to increased savings for the buyers as a result of streamlining of property prices and reduced acquisition costs.
Stamp duty charges would also be reduced as the property can be registered at a lower price. This is great news for new homebuyers thinking of availing housing finance. If you are a potential applicant, make sure to use a home loan EMI calculator to plan the loan in advance.
Benefits to the real estate developers
Since the differential percentage has now been hiked up to 20%, the real estate sector is expected to witness a major boost. This likely increase in demand will help the realty developers clear unsold inventory.
Additional Read: How has Budget been Beneficial to Developers and Home Buyers?
As mentioned earlier,it is the right time for individuals to check home loan interest rates, apply for a loan and seize this limited-time opportunity to enjoy tax relief till 30th June 2021.
If you want to enjoy the aforementioned tax relief benefits as a new buyer, be sure to check your home loan eligibility at Tata Capital’s website. Our housing loan offerings are tailor-made to meet your home-buying and construction needs.
With attractive home loan rates and minimal home loan documentation, your loan processing will be as seamless and speedy as it can be. Come; get in touch with us by visiting our website or giving us a call today!