Budget 2024: At present, deduction of up to Rs 2 lakh is available annually on interest rate on home loan under Section 24B of Income Tax. This means that a maximum deduction of Rs 2 lakh can be claimed on home loan interest payments in a financial year. Currently this facility is available only in the old tax regime.
Budget 2024 : There were major changes in the new income tax regime in the Union Budget 2023 . The government wants to increase the use of the new income tax regime. But, till now taxpayers have not shown much interest in it. This was announced in the Union Budget 2020. It came into effect from the financial year 2020-21. This regime is beneficial for those taxpayers who do not avail tax saving instruments. The tax rates in this are lower than the old regime. Finance Minister Nirmala Sitharaman had made many changes in the Union Budget 2023 . He had announced to give the benefit of standard deduction in the new tax regime. Also, the tax exemption limit was increased in this regime.
These changes were made in the new tax regime in Union Budget 2023
Experts believe that the announcements made for the new tax regime in the Union Budget 2023 are not sufficient. He believes that the government should also give the benefit of deduction on home loan interest in the new tax regime. This will increase the number of taxpayers using this regime. The reason for this is that many working people have taken home loans to buy houses. They pay EMI every month. In the old tax regime, they get the benefit of deduction on home loan interest rate. Many of these taxpayers do not invest in tax-saving instruments. If the benefit of deduction on home loan interest is available in the new tax regime, then they can start using this regime.
Deduction of Rs 2 lakh allowed annually on home loan interest
Currently, a deduction of up to Rs 2 lakh is available annually on home loan interest rate under Section 24B of Income Tax. This means that a maximum deduction of Rs 2 lakh can be claimed on home loan interest payments in a financial year. Currently this facility is available only in the old tax regime. This significantly reduces the tax liability of people taking home loans. For this reason, many taxpayers consider it beneficial to remain in the new tax regime.
It is necessary to make the new tax regime attractive
If the benefit of this deduction is also given in the new tax regime, then many taxpayers can use the new tax regime. Deduction up to Rs 1.5 lakh is allowed annually on principal payment of home loan. But, this is available under section 80C. Due to this, people investing in tax savings are not able to take advantage of it, because under Section 80C, deduction is allowed up to a maximum of Rs 1.5 lakh.
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