The federal government on Monday prolonged the extra tax deduction of Rs 1.5 lakh on curiosity paid on housing mortgage for the acquisition of reasonably priced properties by yet one more yr to March 31, 2022, a transfer aimed toward boosting demand within the sluggish actual property sector. The extra deduction of Rs 1.5 lakh over and above Rs 2 lakh was launched within the 2019 price range. This was allowed for these shopping for properties for the primary time and of as much as Rs 45 lakh. Within the price range speech for the 2021-22 fiscal yr, Finance Minister Nirmala Sitharaman stated the federal government sees ‘Housing for All’ and reasonably priced housing as precedence areas.
“Within the July 2019 Finances, I supplied an extra deduction of curiosity, amounting to Rs 1.5 lakh, for a mortgage taken to buy an reasonably priced home. I suggest to increase the eligibility of this deduction by yet one more yr, to 31st March 2022,” she stated.
The minister stated the extra deduction of Rs 1.5 lakh shall due to this fact be out there for loans taken up until March 31, 2022, for the acquisition of an reasonably priced home.
Now, an individual buying an reasonably priced home will get an enhanced curiosity deduction of as much as Rs three.5 lakh.
“Additional, to maintain up the provision of reasonably priced homes, I suggest that reasonably priced housing tasks can avail a tax vacation for yet one more yr – until 31st March, 2022,” Sitharaman stated.
The minister stated that the federal government is dedicated to advertise the provision of reasonably priced rental housing for migrant employees. “For this, I suggest to permit tax exemption for notified Reasonably priced Rental Housing Tasks.”
These two Finances proposals are aimed toward rising demand in addition to provide within the reasonably priced housing phase, which has already been accorded with the infrastructure standing.
Based on property consultants and information analytic companies, housing gross sales throughout main 7-Eight cities fell round 40-50 per cent through the 2020 calendar yr as a result of COVID-19 pandemic. Nonetheless, demand has been steadily enhancing since July final yr on pent up as nicely festive demand.