Offering numerous incentives and tax benefits, the Union Budget 2025, presented by the Finance Minister, Nirmala Sitharaman, on 1st February, 2025, has truly emerged as a game changer for homebuyers across all segments, whether seeking residential plots for sale or wanting to invest in a second home. The record eighth budget presented by the FM aims to strengthen key GDP drivers like the real estate sector. Currently sharing around 7.3% towards the nation’s GDP, the real estate sector is expected to contribute a massive 15.5% to the GDP by 2047.

Eyeing the growth capacity of the real estate sector, especially housing, the Income Tax Union Budget 2025 has unveiled strategic incentives and resolved various complexities, making home buying a reality for many out there. Potential homebuyers looking for residential plots for sale or an apartment in a group housing society, have now gotten a step closer towards realizing their dream of owning a home because of various reliefs and exemptions announced by the FM.

Income Tax Rebate

A massive increase in the income tax exemption to Rs. 12 lakhs per annum under the new tax regime is clearly the most celebrated move of the budget. This tax deduction relief will increase the disposable income of middle-class families, thus boosting their purchasing power. More and more people, hence, would now be able to realize their dream of owning a home, giving a boost to anyone looking for an independent house for sale in Noida.

As a result of income tax free up to Rs. 12 lakhs per annum, a boost in savings will let individuals manage their existing loans better and will also enhance their loan eligibility. This will certainly make homeownership and other large investments, such as going for residential plots for sale in Noida , more accessible. It can safely be said that an increase in disposable income will have a ripple effect on the retail loan industry, especially home loans.

Tax Relief for Residential Property Investors

All conditions have now been removed towards allowing two properties to be considered’self occupied’. As per Union Budget 2025, homeowners can now mark two homes as self-occupied, a major change from the previous policy that would allow relief for only one property. The budget exempts second property from any tax liability on notional rental income. If the property is not rented out, this relief will let homeowners claim nil tax valuation, thus boosting the rental housing sector.

For instance, a homeowner living in Gurgaon, who earlier had to pay tax on the notional rental income per annum for their second home in Noida, will now be exempt from this obligation, helping them save thousands in taxes and simplifying the tax filing process for them, making dreams like seeking an independent house for sale in Noida sound achievable.

Increase in Annual Limit for TDS on Rent.

Another measure taken towards the housing sector includes increasing the income tax cap on rental income from the current Rs. 2.4 lakhs to Rs. 6 lakhs from the next financial year (FY). This move, where the threshold for Tax Deducted at Source (TDS) has more than doubled, is considered beneficial for homeowners with lower rental income as it ensures an immediate higher cash flow for them. Further, it reduces the paperwork and compliance burden on people taking homes on rent.

For example, a person earns Rs 20,000 per month as rental income. Previously, their tenant had to deduct 10% TDS before paying rent, meaning the property owner received only Rs. 18,000 as rent. Now, with the revised threshold, there will be no TDS deductions, ensuring a seamless inflow of Rs. 20,000 into their account. As a result, more people will now gravitate towards residential plots for sale as a way of creating a rental source.

“The simplified TDS on rent decreases the compliance burden and enhances liquidity for landlords, which will positively impact the rental housing market, especially in metro cities. Previously, homeowners could claim only one self-occupied property as tax-free; now, they can claim two – thereby removing taxation on notional rental income from a second home,” explained Anuj Puri, chairman, Anarock.

Continuation of the SWAMIH Fund

The Special Window for Affordable and Mid-Income Housing (SWAMIH) fund was created to restart construction of stalled housing projects and provide homes to buyers whose money was stuck in these projects. The fund, as of January 2025, has successfully handed over the keys for 50,000 such homes and aims to deliver 40,000 more homes through 2025 under this initiative.

Following the success of the SWAMIH Fund, the Central Government has announced the allocation of Rs. 15,000 crore towards SWAMIH Fund 2.0 to complete 1 lakh stressed housing projects. This initiative, established as a blended finance facility with contributions from the government, banks, and private investors, will reduce the financial burden on middle-class families that are currently juggling with both home loan EMIs and rentals for their alternate dwellings as their apartments are not ready.

It will instill people’s confidence in the real estate sector, further strengthening the affordable and mid-income housing market and driving real estate growth. More and more people, once out of this juggling of their finances, will be able to focus on going for an independent house for sale in Noida and other parts of Delhi-NCR.

This budget is a game-changer for the middle class.” Mr Mayur Shah, MD of Marathon Group, was quoted as saying about the Union Budget 2025. “The government’s tax reliefs are designed to boost consumption, which can also benefit the real estate sector. Not only will this drive demand in affordable and mid-income housing markets, but other key measures like extending tax benefits to second homes and committing to the completion of 1 lakh stalled residential units will surely boost homebuyers’ confidence. These initiatives reflect a thoughtful approach to economic growth that directly benefits both consumers and the industry.”

Union budget 2025, in its true sense, is the harbinger of hope not only for the people whose hard-earned money was stuck in stalled residential projects but also for the young generation that desires to invest in the real estate sector and own a home. Reduced income tax liabilities, removal of deemed rental income tax, an increase in TDS thresholds, and simplified tax processes are some key factors from the budget that will set the stage for a robust real estate market for homebuyers looking for residential plots for sale in Noida.