Budget 2023-24: Key Takeaways For Homebuyers

What does the Budget 2023-24 has for India’s homebuyers? Find out!

The Budget 2023-24 has several positive announcements for India’s middle class, which basically account for the majority of homebuyers in the country. While presenting her 5th Union Budget on February 1, 2023, Finance Minister Nirmala Sitharaman made several measures that would help the country’s taxpayers save more from their income.

Income tax exemption limit increased to Rs 7 lakh

The Budget 2023-24 proposed to raise the personal income tax rebate limit to Rs 7 lakh under the new tax regime from the previous Rs 5 lakh. The tax slabs have also been cut to 5 from 6 earlier.

"Taxpayers at both ends of the spectrum will be encouraged under the new regime as there will be no liability up to annual income of Rs 700,000 on the one hand and surcharge on annual income above Rs 5 crore has been reduced from 37 to 25% at the high income end," says Alok Agrawal, partner, Deloitte India.

New income tax regime is default tax regime

The new income tax regime has been made the default tax regime in the Budget 2023-24. However, citizens will continue to have the option to avail the benefit of the old tax regime, the FM said in her Budget Speech.

Capital gains on investment in property capped at Rs 10 cr

The Budget has proposed capping the deduction from capital gains on investment in residential house under Sections 54 and 54F at Rs 10 crore. So far, there was no cap on deduction an individual or an HUF can take from gain arising from the sale of a house property or other investments by reinvestment in another house property.

While industry is of the opinion that this move could impact the ultra-high-net-worth people as they need to pay long-term capital gain on the sale of house property with big-ticket deals, Sitharaman said the move is meant for better targeting of tax concessions and exemptions.

 “The cost of the new asset purchased is more than Rs 10 crore, the cost of such asset shall be deemed to be Rs 10 crore. This will limit the deduction under the two sections,” says the Memorandum Explaining the Provisions in the Finance Bill, 2023

65% higher outlay for PMAY

The FM announced an outlay of Rs 79,000 crore towards the Pradhan Mantri Awas Yojana (PMAY). In last year's Budget, Rs 48,000 crore were allocated for the completion of 84 lakh houses under the PMAY. This accounts for around 65% more money that has been set aside towards the PMAY last year.

“This will replenish the affordable housing demand across the country and fulfill the home-buying aspirations of medium-class buyers,” says Ashwani Kumar, Pyramid Infratech.