Budget 2016 proposes that tax benefit will available if the acquisition or construction is completed within five years from the end of the financial year in which capital was borrowed instead of three years.
The industry was probably expecting this to happen. The delay in delivery of real estate projects was taking a toll and tax benefits were being denied to buyers.
Budget 2015 proposes to increases the time limit from 3 to 5 years now.
The increase in time period for acquisition or construction of self-occupied house property for claiming deduction of interest should bring in some relief to taxpayers.
Currently section 24 provides that interest payable on capital borrowed for acquisition or construction of a house property shall be deducted while computing income from house property.
The deduction of an amount of Rs 2 lakh is allowed where a house property referred to in sub-section (2) of section 23 (self-occupied house property) has been acquired or constructed with capital borrowed on or after the 1stday of April, 1999 and such acquisition or construction is completed within three years from the end of the financial year in which capital was borrowed.
It is also proposed to provide that standard deduction of 30% shall be allowed against the amount received on account of unrealised rent while computing the house property income.
Further, it is proposed to provide that the date of agreement fixing the amount of consideration for the transfer of immovable property and not the date of registration shall be taken for the purposes of computing capital gains in case of transfer of immovable property if any payment in consequence of such agreement has been made by the purchaser of the property through any mode other than cash.