June 9, 2023: In a bid to boost the construction sector and promote homeownership, the government has announced the introduction of a tax credit for individuals undertaking the construction of new houses. The tax credit scheme will be applicable for tax years 2024 to 2026, offering eligible individuals a reduction in their tax liability.
According to the details shared by the government, individuals who construct a new house and obtain a completion certificate during the respective tax year will be eligible for the tax credit. The completion certificate must be furnished along with the tax return for the applicable tax year to claim the credit.
The tax credit allowed will be the lesser of ten percent of the tax assessed to the individual for the tax year or one million rupees. This means that individuals can receive a tax credit equivalent to ten percent of their assessed tax liability or up to a maximum of one million rupees, whichever is lower.
The term “new house” is defined under this section as a residential house for which the layout plan is approved by the concerned authority on or after July 1, 2023. This ensures that only recently approved housing projects are eligible for the tax credit, encouraging the construction of new properties.
The introduction of this tax credit scheme aims to incentivize the construction of new houses, which will contribute to the growth of the housing sector and provide more affordable housing options for individuals. By reducing the tax burden on individuals involved in new house construction, the government aims to facilitate the creation of quality residential properties across the country.
This initiative aligns with the government’s commitment to promoting economic development, job creation, and infrastructure expansion. By encouraging investment in the construction sector and facilitating the completion of new houses, the government envisions a positive impact on the overall economy and the well-being of the citizens.
Individuals interested in availing the tax credit should ensure compliance with the defined criteria and submit the necessary documentation along with their tax return for the respective tax year. The government’s effort to incentivize new house construction is expected to drive economic growth and provide housing opportunities for the citizens of the country.