Page 33 - Union Budget_2019

Union Budget 2019
Ghaziabad, Gurugram,
Faridabad),

• Hyderabad,
• Kolkata and

• Mumbai (whole of Mumbai
Metropolitan Region);
80% or more of such floor area 80% or more of such floor area ratio

ratio where such project is located where such project is located in any
in any place other than the place place other than the place referred

referred above above

Further, it is proposed to include the additional condition for the purpose of claiming the deduction under
Section 80-IBA that the stamp duty value of a residential unit in the housing project shall not exceed Rs. 45
lakhs

“Stamp duty value” means the value adopted or assessed or assessable by any authority of the Central

Government or a State Government for the purpose of payment of stamp duty in respect of an immovable
property.

These amendments will take effect from 1st April, 2020 and will, accordingly, apply in relation to
assessment year 2020-21 and subsequent assessment years.

This will be a great benefit for middle class people who are planning to purchase a house for the first
time, as it allows them to claim Rs.1,50,000 as deduction under the above new provision and

Rs.2,00,000 under existing provisions. Therefore, a person purchasing an affordable house will get an
enhanced deduction upto Rs.3,50,000 on the interest paid. This will substantially boost the demand in
real estate sector.

Section 24 provides for deduction of interest on borrowed capital for purchase or construction of house
property upto Rs. 2,00,000. Please note that, if the total interest paid is less than Rs. 3,50,000 say Rs.

3,00,000 then the deduction under Section 80EEA shall be restricted to the unclaimed portion under
Section 24 i.e. Rs. 1,00,000 (Rs. 3,00,000 less Rs. 2,00,000 deduction under Section 24)

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