Union Budget 2024-25 Date: Confederation of Real Estate Developers Association of India (CREDAI) demands that the scope of tax exemption in home loans should be increased. Currently the limit for exemption on home loan interest repayment is Rs 2 lakh. It should be increased to Rs 5 lakh.
Union Budget 2024-25 Date: Preparations for the country’s general budget are in full swing. Why not, this is the last budget of Modi government 2.0 before the election season. Although, this will be only interim, but like every time, our expectations from you are not low. If there are elections, the government can also give benefits like new schemes and tax exemptions to attract people. This is the reason why the real estate sector is also looking towards Finance Minister Nirmala Sitharaman to fly high. Demand for tax exemption on home loan has been placed. Apart from the general public i.e. taxpayers, the real estate sector is also expected to get huge benefits from this.
Tax exemption up to Rs 5 lakh on home loan repayment
Confederation of Real Estate Developers Association of India (CREDAI) demands that the scope of tax exemption in home loans should be increased. Currently the limit for exemption on home loan interest repayment is Rs 2 lakh. It should be increased to Rs 5 lakh. CREDAI believes that the interest rates are very high. It is not easy to cut the repo rate till the second quarter of 2024. This has had a direct impact on the EMI of home loan. Home buyers have to pay higher EMI every month. In such a situation, they can be benefited by giving them tax exemption.
Tax exemption under Income Tax Section 80C
Income tax deduction of up to Rs 1.5 lakh can be availed on payment of principal amount of home loan. This may also include stamp duty and registration fees, but these can be deducted only once in the year in which they are paid. Home loan should be taken only for purchasing a new house or constructing a house.
Note:
If you sell the house within 5 years of purchasing it, then the tax deduction received so far under Section 80C will be added to your income in the year in which you have sold the house.
Tax exemption on home loan interest payment under Income Tax Section 24(b)
You can claim tax exemption of up to Rs 2 lakh on payment of home loan interest. The house for which the loan has been taken, whether you are living in it or it is vacant. However, if you have given that house on rent, then you will not get the benefit of tax deduction.
Demand will increase in real estate
By giving tax exemption on home loans, middle income group home owners will have additional income to spend and others will also be motivated to buy houses. CREDAI Chairman Manoj Gaur believes that ‘For growth in the sector, it is necessary that there is demand, and the demand will increase only when the taxpayers are given some benefit in tax exemption.’ Due to the increase in repo rates, the interest rates on home loans have also increased continuously. An increase has been seen. Even if these remain stable, housing demand will not increase. Therefore, the government will have to give exemption to the taxpayers only. Only then can the sector regain momentum.
How to get tax exemption on home loan
Under Section 24 of the Income Tax Act, tax relief is available on home loan payments. EMI has two parts. One part is of interest and the other is of principal. Tax exemption of Rs 2 lakh is available on the interest portion in a financial year under Section 24(b). The benefit of deduction under section 80C is available on the principal portion, the limit of which is Rs 1.5 lakh.
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