Budget 2008 may bring cheer to senior citizen who let out their property on rent. The government is considering a proposal to exempt tax on rental income for senior citizens. At present, every age group enjoys tax exemption of 30% on rental income.
Sources said since senior citizens own only a minority of the houses that are offered on rent, it would not put too much pressure on the exchequer if the proposal is implemented and hence, stands a good chance of approval.
The National Housing and Habitat Policy has also recommended an increase of the tax exemption limit for rental income. The policy was cleared by the Cabinet in November.
The ministry of urban housing and poverty alleviation is of the view that the proposal if cleared in the budget would unlock several millions of houses for rental accommodation.
The ministry has also mooted a proposal to increase the tax exemption limit from 30% to 50% in case for all rental earnings. According to government estimates, around 16 million houses in the country which are unoccupied can come into circulation.
Last year, the government announced levy of service tax on commercial properties. If the proposal to increase the floor for tax concession on rental income goes through it can become a revenue neutral exercise for the Centre.