Government Rules Out Tax Incentive Beyond Rs. 2 Lakh For Second Home
it is prudent to subsidise first-time buyer and not the second property owner
Feb 04, 2017
Source : NDTV Profit
Proposal to restrict tax incentive for second home.

New Delhi: Ruling out rollback of the proposal to restrict tax incentive for second home to Rs.2 lakh per annum, Revenue Secretary Hasmukh Adhia on Saturday said there is no point in subsidising purchase of second property by those who have surplus funds.

Moreover, he added that the tax incentive for second home loan borrower is being "virtually misused."

Citing limited resources, he said it is prudent to subsidise first-time buyer and not the second property owner who is not staying in that but earning income from the second unit. 

The Finance Bill 2017 has restricted set-off of loss towards second home against other heads of income up to Rs. 2 lakh under Section 71 of the Income Tax Act.

Under the present dispensation, there is no such limit for set-off of loss from house property, which is mainly the difference between the rental income and interest on home loan. In other words, a buyer could deduct the entire net interest paid on the home loan.

"Government resources are very very limited. The question is should the government be subsidising first-time home owners who are occupying own house or should the government be subsidising the second acquisition of the property by people who have got surplus money to invest in real estate," Adhia said while addressing industry representatives here.

He cited an example: "If I have already my own house, I buy a new property by taking a bank loan of R

s. 1 crore, the interest on it is Rs. 10 lakh per annum and I rent it out to somebody who gives out Rs. 3 lakh as rent, the remaining Rs. 7 lakh you could offset against your salary income or business income."

The loss to the government for the second house were almost one third of that, he said, adding that it came to about Rs. 3 lakh in addition to Rs. 2 lakh advantage.

"So, why should the government bear the cost of second house acquisition, that was the question. We have a lot of people to be given affordable housing, we need to help them out... so the revenue loss was huge and people were virtually misusing it," he said.

The Finance Bill, 2017, proposes to restrict such set-off of house property loss to Rs. 2,00,000 per annum only. Balance loss, if any, will be carried forward to be set off against house property income of subsequent 8 years.

Hence, individual tax payers having loss of more than Rs. 2,00,000 will now have a higher tax outgo.

"In line with the international best practices, it is proposed to insert sub-section (3A) in the said section to provide that set-off of loss under the head 'Income from house property' against any other head of income shall be restricted to Rs.

 2 lakh for any assessment year," the Finance Bill 2017 said.

"However, the unabsorbed loss shall be allowed to be carried forward for set-off in subsequent years in accordance with the existing provisions of the Act."

Latest Realty News

Union-Budget-2017-gives-infrastructure-status-to-affordable-housing
Feb 01, 2017
In Union Budget 2017,Finance Minister Arun Jaitly reserved his best for the real estate sector,which witnessed a slump post demonetization.
Reliable-Rating-For-Developers-Launched
Jan 26, 2017
The launch of Genuine Reliability and Customer Satisfaction GRACS Star rating for developers by GharaBari.com would bring transparency in the realty sector.
Odisha-capital-city's-growth-linked-to-real-estate-developers
Jan 21, 2017
BHUBANESWAR: Real estate developers have contributed a lot for the fast development of the Capital City by providing facilities of metro life under one roof, said Vice-Chairman of Bhubaneswar Development Authority (BDA) Dr Krishan Kumar.
Credai-Odisha-to-hold-4-days--property-expo-from-12th-January-
Jan 05, 2017
Credai Odisha Chapter is going to hold 4 days property expo from 12th January to 15th January at Janata Maidan, Bhubaneswar.
Property-cards-issued-by-South-corporation
Dec 21, 2016
NEW DELHI: South corporation on Wednesday started distribution of Unique Property Identification Code (UPIC) cards along with inaugurating the "Link your Record" programme for residents in its jurisdiction.
JSW-Cement-launches-Heavy-Duty-Concreel-HD-Cement
Oct 21, 2016
Hyderabad : With its unceasing efforts in expanding its horizons and giving something new and beneficial to the society, JSW Cement, one of India’s leading cement has added to its foray, a superior quality product called as Concreel HD -One Cement Six Strengths.
JP-Infra-to-build-a-Ganesh-Temple-at-JP-North-at-Mira-Road
Sep 12, 2016
Mr. Vijay Jain, CMD at JP Infra made a huge announcement for their landmark project - JP North at Mira Road to build a Ganesh Temple and the planning towards the same has already been initiated.
Hyderabad-has-huge-potential-for-modern-retail:-Knight-Frank
Sep 08, 2016
Knight Frank India today launched the first edition of its report on Hyderabad retail sector titled – Hyderabad Retail: Unlocking the Potential. The reportlooks into the emerging trends in multi-channel retailing, shopping centers and new formats.
DLF-could-look-at-tweaking-residential-business-model-post-notification-of-RERA-rules-
Aug 31, 2016
NEW DELHI: real estate firm DLF is waiting for the final rules under the real estate regulatory act to be notified to see how it can tweak its business model going forward, said Saurabh Chawla, senior executive director (finance) at DLF during a call with analysts.
Revival-of-real-estate-sector-is-top-priority-of-the-government:-Ravi-Shankar-Prasad-
Aug 20, 2016
NEW DELHI: The government is willing to provide more incentives for the well-being of the real estate and construction sectors but it has to become more proactive and sensitive towards constructing low-cost housing with high quality for intended beneficiaries, said Ravi Shankar Prasad, minister of Law & Justice, Electronics & Information Technology.

Latest Realty News Of State

Realty Talk's