What has Real Estate Industry gained in Budget 2025?

From what was presented by our finance minister, we saw a strong emphasis on Urban infrastructure, housing and investment. The budget 2025 brings several key measures impacting the real estate sector.

There were no changes seen in home loan benefits and property tax, however, we did hear about various initiatives to help support Urban development and housing.

SWAMIH Fund 2

Under the Special Window for Affordable and Mid-Income Housing (SWAMIH) 50,000 dwelling units in stressed housing projects have been completed & keys handed over to home buyers. Another 40,000 units will be completed in 2025, further helping middle class families who were paying EMIs on loans taken for apartments, while also paying rent for their current dwellings.

Building on this success, SWAMIH Fund 2 will be established as a blended finance facility with contribution from the Govt, banks and private investors. This fund of 15,000 crore will aim for completion of another one lakh units.

Welcome news - Landlords & Tenants

Union budget 2025 has brought welcome news for landlords & tenants with a significant increase in the Threshold for TDS on rent. Annual limit was raised from 2.4 lakhs (which was earlier) to 6 lakhs annually - a move expected to ease the tax & compliance burdens and thereby simplify rental transactions. This adjustment would mean that landlords will now only be required to deduct TDS on rental income exceeding Rs. 6 lakhs annually 

TAX relief for residential property investors

Presently tax-payers can claim annual value of self-occupied properties as NIL only on the fulfillment of certain conditions. Considering the difficulties faced by them, it has been proposed to allow the benefit of 2 Self-occupied properties without any condition.

This means that individual taxpayers in India will be able to declare the annual value of up to two properties they live in themselves (self-occupied properties) as zero for tax purposes, regardless of any other conditions. This effectively means they won't have to pay any income tax on the imputed rental income from these two properties

National framework for GCC

A national framework will be formulated as guidance to states for promoting Global Capability centers (GCCs) in emerging Tier-2 cities. This will suggest measures for enhancing availability of Talent and infrastructure, building-bye law reforms & mechanisms for collaboration with industry.

Extension for Incorporation of Start-ups

It's very nice to see that Indian start-up ecosystem has enough support. It was proposed to extend the period of incorporation by 5 years to allow the benefit available to start-ups which are incorporated before 1st April 2030.

Additionally, the finance minister also exempted income tax for individuals earning up to Rs 12 lakh per annum, which may further boost consumption. This is expected to enhance spending power & drive housing demand & investments in the real estate sector.