Real Estate Tax Hopes for Budget 2025

Current caps for home loan interest (INR 2 lakh) and principal repayments under Sections 80C and 24(b) are inadequate. A combined deduction of INR 5 lakh would boost demand in the housing market.

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The current INR 2 lakh cap on set-off losses from house property against other incomes should be removed or limited to commercial properties, benefiting the real estate sector.

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Sections 54, 54B, 54D, and 54F should align with the 24-month holding period for capital gains on immovable property, reducing the holding requirement from 36 to 24 months.

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The 2-year cooling period for unsold properties under Section 23(5) should be extended to 5 years, or the provision should be revised to apply only to properties generating rental income.

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Include Real Estate in Section 72A: Real estate should be included under Section 72A for carry forward of losses, similar to capital-intensive sectors like manufacturing and infrastructure.

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Taxation of JDAs by Non-Individuals: Provisions for taxing JDAs involving companies should be clarified, as current rules apply only to individual or HUF owners.

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Group Tax Consolidation Regime: Introduce a group tax consolidation regime for companies with common control, streamlining tax filing and reducing compliance costs.

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Reintroduce 100% Tax Holiday: Extend Section 80-IBA’s 100% tax exemption for affordable housing projects with updated criteria to promote affordable housing and help meet government goals.

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Dividend Deployment Deduction/Exemption: Allow deductions for companies redeploying dividends in business expansion to encourage reinvestment.

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Increase Safe Harbour Limit The 20% safe harbour for discrepancies between stamp duty value and sale price should be increased to 25%, and applied retrospectively.

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