The realty industry has welcomed the interim budget saying the many tax proposals will give the needed fillip to the sector that has reeling since the past two years with severe liquidity crisis and demand slowdown.

The budget seeks to extend tax sops for affordable home developers and to remove the tax on notional rent for a second housing unit as well as unsold units. It also seeks to extend the benefits under Section 80-IBA of the Income Tax Act for one more year--to housing projects approved till March 2020, which will boost supply of affordable housing.

According to property consultants, there are about 6-7 lakh of unsold units with developers in seven-eight major cities alone. The benefit of rollover of capital gains up to Rs 2 crore under section 54 of the IT Act will now be available for investment in two houses from the present only one unit. It also proposes to enhance the TDS deduction threshold for rent to Rs 2,40,000 from Rs 1,80,000 now.

Credai’s Getamber Anand said the proposal to lower GST on home buyers is extremely encouraging. He also welcomes the two-year exemption from notional rent on unsold inventory. The general exemption of income tax up to Rs 5 lakh will benefit 3 crore taxpayers is likely to increase the demand for affordable and mid-income housing segments, JLL India’s Ramesh Nair said. Credai-MCHI’s Nayan Shah said overall the brings a lot of relief for the mid income taxpayers and some long awaited cheer to the real estate industry.

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