Budget 2025 brings significant changes for homeowners and homebuyers, set to come into effect on April 1, 2025. These changes aim to provide relief in the form of tax savings and improved opportunities for home ownership.
One of the key amendments proposed in the Budget 2025 is related to the taxation of self-occupied properties. Previously, if a homeowner was unable to occupy a property due to reasons like employment or business in another city, they were required to pay taxes on that property’s annual value. However, with the new provision, the annual value of a second property that remains unoccupied due to such reasons will be considered NIL. This means homeowners will no longer face additional tax on their second self-occupied property. This will particularly benefit those looking to invest in additional homes, especially in cases where families are transitioning from joint to nuclear living arrangements.
Another major change pertains to rental income taxation. The TDS (Tax Deducted at Source) threshold has been revised, aiming to ease the burden on landlords and tenants alike. As per the proposed amendment, the threshold for TDS applicability on rental income will increase from ₹2.4 lakh annually to ₹50,000 per month. This means that landlords receiving rents below ₹50,000 per month will no longer be required to deduct TDS. This change will come as a relief to many small landlords whose rental income falls below this revised threshold.
For salaried individuals, Budget 2025 also brings good news. The government has proposed an exemption from tax for individuals earning up to ₹12 lakh annually. This will provide an additional tax saving of ₹80,000 for people in this income bracket. For instance, a person earning ₹12 lakh annually can use the saved amount to pay a higher EMI and afford a more expensive property. With the savings, they could potentially buy a property worth ₹52-58 lakh, compared to ₹45-50 lakh under the current structure.
The launch of SWAMIH Fund-2 in Budget 2025 also holds great promise for homebuyers, particularly for those who are struggling with incomplete housing projects. The first SWAMIH fund helped complete 50,000 stalled projects, and now the second fund aims to complete an additional 40,000 units in 2025. This initiative is expected to benefit middle-class homebuyers who have been paying EMIs for incomplete properties.
These changes in tax policies and government schemes offer significant relief to homebuyers, making it easier for them to purchase homes and manage their finances. The revised tax policies will take effect from April 1, 2025, and will bring positive changes to the real estate market.
