Home­buy­ers have a lot to gain from the bud­get

Gen­uine buy­ers and ten­ants to ben­e­fit the most

HT Estates - - HTESTATES - HT Es­tates Cor­re­spon­dent Par­tic­u­lars Pre Bud­get 2,000,000 Post Bud­get 2,000,000

First time home­buye r s a r e l i ke l y t o ben­e­fit the most from finance min­is­ter Arun Jait­ley’s bud­get as they have been given an ad­di­tional de­duc­tion on in­ter­est for a home loan sanc­tioned in the fi­nan­cial year 2016-17, up to ₹ 35 lakh, pro­vided the house value doesn’t ex­ceed ₹ 50 lakh and the buyer does not own any other house on the loan sanc­tion date.

This ben­e­fit ought to have been ex­tended for ev­ery­body, not only the lower mid­dle class. Also, there should not have been a cap on the cost of the house which in this case has been set at ₹ 50 lakh, says a tax ex­pert.

The gov­ern­ment had ear­lier pro­vided a to­tal de­duc­tion of up to ₹ 1 lakh, to­wards in­ter­est on hous­ing loan, for loan up to ₹ 25 lakh and house value up to ₹ 40 lakh, to be availed over fi­nan­cial year 2013-14 and fi­nan­cial year 2014-15 . The Gov­ern­ment has now re­in­stated a sim­i­lar de­duc­tion with re­vised lim­its and con­di­tions, says Parizad Sir­walla, Part­ner – Tax, KPMG In­dia

The Bud­get has also pro­posed an in­crease in the limit of de­duc­tion of rent paid under section 80GG from ₹ 24,000 per an­num to ₹ 60,000 per an­num to pro­vide re­lief to those who live in rented houses and do not re­ceive a House Rent Al­lowance.

In light of the in­creased rental costs, the in­creased de­duc­tion lim­its will ben­e­fit gen­uine ten­ants who rent a house be­cause they do not own one, says Parizad

Tax ex­perts also point out that the pro­posal to ex­tend the tax de­duc­tion limit on house rent al­lowance will only ben­e­fit those who do not get house rent al­lowance.

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