New Delhi: The limit for interest deduction on home loans should be enhanced to Rs 5 lakh per annum from the present Rs 2 lakh, the Confederation of Indian Industry has urged the government.
In its wish list presented to the government for the Budget 2020, the industry body has said that the exiting limit f Rs 2 lakh is not enough considering the prices of properties have gone up and the quantum of the loan taken by the homebuyers has also gone up proportionately. Consequently, the burden of interest that the buyers have to bear has also gone up.
Hiking the limit to Rs 5 lakh will bring a new set of buyers to the real estate market and will improve the prospects of the industry which has been facing negative headwinds for the past many years and is gasping for liquidity. The move will also help a lot of income tax assesses, the chamber said.
“The quantum of set-off of losses from house property (self-occupied or rented) against other heads of income should be increased from Rs 2 lakh to Rs 5 lakh,” the chamber said in its request to the government.
In the Budget of 2019, government had given some income tax leeway on interest payments on affordable housing loans. It had increased the interest deduction available on home loans taken by March 31, 2020 for the properties priced up to Rs 45 lakh by Rs 1.5 lakh. Thus, the total deductions available to the buyer went up to Rs 3.5 lakh per annum.