Buying a home is easily the biggest expenditure a common man usually undertakes in his/her entire life. Since shelter is one of the basic necessities of life, the government tries to provide tax incentives to the taxpayer to support the purchase of homes, an economic activity that also has wide ramifications on the broader economy in general since the fortunes of a number of industries such as cement, paint, steel, electricals, consumer goods, furniture and home décor are linked with housing.
The big picture of home loans
Any income tax relief extended on taking home loans, is, therefore, a matter of relief for both the individual as well as for the economy of India.
Against this backdrop, let’s find out the common expectations of a lot of people as Finance Minister Nirmala Sitharaman presents the budget for FY25 on July 23.
Budget 2024: Bigger relief on home loan interest?
A general demand among experts is that raising the income tax rebate on home loan interest would bring relief to the buyer. This limit should be raised from the current level of Rs 2 lakh to Rs 5 lakh to provide a major fillip, thinks CEO and co-founder of Basic Home Loan, Atul Monga.
“If the Finance Minister agrees to such a suggestion, it would undoubtedly offer significant relief to the borrower,” agreed Himadri Mukhopadhyay, secretary, Income Tax Bar Association Calcutta.
According to section 24 of the Income Tax Act 1961 home loan takers can claim deduction up to Rs 2 lakhs on the interest for self-occupied property.
Bigger ticket of home loans
The same suggestion has been given by National Real Estate Development Council (NAREDCO), a body of real estate developers, especially on the ground that property prices are rising and so are home loan value. They feel it would also boost the demand for affordable housing.
NAREDCO also mentioned that the Modi 3.0 government come forward with the second tranche of the Special Window for Affordable and Mid-housing (SWAMIH) Fund.
Fixed interest for 5 years
NAREDCO president G Hari Babu also batted for a 5% fixed interest rate for home loans up to Rs 25 lakh for the first 5 years. It would boost demand for home loans, he told HT.com.
“This important segment must be revived with high-impact measures like tax breaks for developers so that they will focus more on affordable housing, and for buyers to improve affordability,” said chairman of property consultant major Anarock, Anuj Puri.
The lower part of the real estate market in India needs a boost. If Finance Minister Nirmala Sitharaman gives income tax relief on home loans, it would do both the individual as well as the industry a lot of good. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
