The trend in Budget 2020 seems to be towards a reduction in tax rates in lieu of giving up exemptions and deductions. Currently, it is only an option for individuals, but the direction is clear. This affects many industries such as real estate and insurance.
In case of real estate, the impact of limiting interest deduction up to Rs 2 lakh has had a detrimental effect. For example, if a person takes a loan of Rs 1.4 crore to buy a property for Rs 2 crore. His rental income would be around 2.4 per cent or Rs 4.8 lakh a year.
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper