|Interim Budget for FY19-20 was presented today in the parliament by the Finance Minister. During his budget speech, he has laid down the road map of economic activities for the country over the next 10 years or so. Important highlights of the speech affecting investments are as given below :|
1. Indian GDP is poised to become $ 5 trillion from existing $ 2.5 trillion by 2024 and by 2032, it will touch $ 10 trillion. That means Indian businesses will grow four times in next 13 years.
2. To give a boost to Real estate sector, following major announcements have been made:
a. As per existing rules, income tax on notional rent is to be levied on second residential house even if the house is not rented out. That provision has been taken out, meaning thereby, we need NOT pay income tax on notional rent if the house is not rented out and can show both the residential houses as self occupied.
b. Earlier, to save income tax, Long term capital gains(LTCG) accrued by selling a house were being utilised in buying a residential house under section 54 of income tax act. Now, instead of one residential house, we can buy two residential houses with Long term capital gains with a condition of LTCG not exceeding 2 Crore. This exemption will be allowed only once in a life time.
3. In the light of the above, It is the right time to start allocating a substantial portion of investments towards equity mutual funds which are going to generate enormous wealth as Indian economy is poised to grow four times in next 13 years or so.
An opportunity to acquire a real estate asset under distress sales may be considered for investments.