Homeowners get simpler tax rules, higher limits

Homeowners get simpler tax rules, higher limits

Homeowners get simpler tax rules, higher limits ByHT Correspondent Feb 02, 2025 01:53 AM IST Share Via Copy Link For multi-property owners, the government simplified the tax treatment of self-occupied properties through specific amendments to Section 23 of the IT Act

When homeowner Akhilesh Kumar learned about the new tax provisions for property owners in the budget announced by finance minister Nirmala Sitharaman on Saturday, he quickly calculated that he could save up to ₹1.5 lakh annually on his rental income.

(Representative picture) For homeowners stuck in delayed projects, the budget introduced a new SWAMIH Fund 2 with a corpus of ₹15,000 crore (HT Photo)

In her budget speech on Saturday, Sitharaman announced several measures aimed at easing the tax burden on property owners, including a significant increase in the threshold for Tax Deducted at Source (TDS) on rental income from ₹2.4 lakh to ₹6 lakh annually. This means TDS will now only apply when monthly rent exceeds ₹50,000, up from the previous ₹20,000 threshold.

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“House owners who earn up to ₹25 lakh from renting their property can save substantially from taxes and reinvest it,” said Kumar, though he remains cautious about investment prospects given rising inflation.

The budget’s housing measures extend beyond rental income. For multi-property owners, the government simplified the tax treatment of self-occupied properties through specific amendments to Section 23 of the Income Tax Act. The new provisions state that “the annual value of the property consisting of a house or any part thereof shall be taken as nil, if the owner occupies it for his own residence or cannot actually occupy it due to any reason.”

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Tax professional Ravi Kumar from Patna explained that this change effectively removes the previous distinction between one self-occupied property and others. “Earlier, only one self-occupied property could be treated as having nil annual value. The new provisions simplify this by allowing the same treatment for properties that owners can’t occupy for genuine reasons,” he said.

For homeowners stuck in delayed projects, the budget introduced a new SWAMIH Fund 2 with a corpus of ₹15,000 crore. This first SWAMIH initiative helped complete 50,000 dwelling units in stressed housing projects. “Another 40,000 units will be completed in 2025,” the finance minister noted in her speech, though some beneficiaries said they feel the allocation might be insufficient.

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“The ₹15,000 crore allocation for boosting stressed projects seems too low to benefit the lakhs of people waiting for their flats,” said Shikha Sinha, another Patna resident.

Supriya, who heads Sambodhi Public School on Ashiana Road in the Bihar capital, said she sees these changes as part of a broader positive shift for the middle class. “The revised TDS rules streamline tax compliance, and the changes in self-acquired property taxation make real estate an even more attractive investment option for middle-class families,” she noted.