Updated January 1st, 2024 at 16:23 IST
Home buyers may get upto ₹5 Lakh relief on interest payments in union budget 2024-25 - Details here
With the current interest repayment limit set at Rs.2 lakh, CREDAI is advocating for an increment to Rs.5 lakh read more in details below
The Confederation of Real Estate Developers Association of India (CREDAI) is pressing for a substantial increase in tax exemption on home loans as the nation anticipates the Union Budget 2024-25. With the current interest repayment limit set at Rs.2 lakh, CREDAI is advocating for an increment to Rs.5 lakh, citing the impact of high-interest rates on homebuyers' EMIs.
Union Budget 2024-25 Date: Expectations Soar
As the Modi government 2.0 gears up for the final budget before elections, the real estate sector's eyes are on Finance Minister Nirmala Sitharaman. Speculations arise about potential new schemes and tax exemptions aimed at attracting voters, not only benefiting the general public but also offering substantial advantages to the real estate sector.
CREDAI's Plea: From 2 Lakh to 5 Lakh Tax Exemption
CREDAI contends that current interest rates pose a significant challenge, making repo rate cuts unlikely until the second quarter of 2024. The subsequent impact on home loan EMIs has prompted CREDAI to call for an increase in the tax exemption threshold to Rs 5 lakh, providing relief to struggling homebuyers.
Tax Exemption Details
- Income Tax Section 80C
- Deduction of up to Rs 1.5 lakh on the principal amount of a home loan.
- Inclusive of stamp duty and registration fees, but applicable only once a year.
- Home loan should be for the purchase or construction of a new house.
- Income Tax Section 24(b)
- Tax exemption of up to Rs 2 lakh on home loan interest payments.
- Applicable whether the house is occupied or vacant, but not applicable if the property is rented out.
Potential Impact on Real Estate
The proposed tax exemption increase is anticipated to stimulate demand in the real estate sector. CREDAI Chairman Manoj Gaur emphasizes that for sustainable sector growth, demand must rise, which can be achieved by providing taxpayers with attractive tax benefits. The recent surge in repo rates has led to a continuous increase in home loan interest rates, and unless the government intervenes with tax exemptions, the sector's momentum may dwindle.
The forthcoming Union Budget 2024-25 holds the potential to bring substantial relief to home loan takers with an increased tax exemption on interest payments. As the government navigates the economic landscape, addressing the concerns of the real estate sector becomes crucial for stimulating growth and meeting the expectations of the taxpayers. Homebuyers eagerly await the budget announcement for a potential boost in their financial flexibility.
Published January 1st, 2024 at 16:23 IST