Benefits of tax exemption for house loan recipients Find out the latest information on tax exemptions up to ₹ 5 lakh on interest

Benefits of tax exemption for house loan recipients Find out the latest information on tax exemptions up to ₹ 5 lakh on interest

Benefits of tax exemption for house loan recipients Find out the latest information on tax exemptions up to ₹ 5 lakh on interest

Union Budget for 2024–2025 Date: The Confederation of Real Estate Developers Association of India (CREDAI) is requesting an expansion of the tax exemption program for house loans. Currently, there is a Rs 2 lakh cap on the amount excluded from house loan interest payments. The amount need to be raised to Rs 5 lakh.

Union Budget for 2024–2025 Date: The nation's general budget preparations are well underway. Why not? Before the election season, this is the final budget of the Modi administration 2.0. Even if this is just temporary, as always, we have high expectations for you. In order to attract voters, the government may also provide incentives like new programs and tax breaks during election seasons. For this reason, the real estate industry also expects Nirmala Sitharaman, the Finance Minister, to soar. There has been a request for a house loan tax exemption. In addition to the general public, or taxpayers, the real estate industry is anticipated to gain greatly from this as well.

Tax exemption on house loan repayment up to Rs 5 lakh

The Confederation of Real Estate Developers Association of India (CREDAI) is advocating for an expansion of the tax exemption scope for house loans. Currently, there is a Rs 2 lakh cap on the amount excluded from house loan interest payments. The amount need to be raised to Rs 5 lakh. According to CREDAI, interest rates are quite high. Reducing the repo rate until the second quarter of 2024 is a difficult task. The EMI for a house loan has been directly impacted by this. Monthly EMI payments for home purchases are greater. They stand to gain if they are granted a tax exemption in this scenario.

Section 80C of the Income Tax Exemption

Once the principal amount of a house loan is paid off, an income tax deduction of up to Rs 1.5 lakh is available. Stamp duty and registration costs may also be included, although they may only be subtracted once per year from the total amount paid. Only new home construction or acquisition should be funded by home loans.

Note: The tax deduction you have already obtained under Section 80C will be applied to your income in the year that you sell the property if you do so within five years of buying it.

Section 24(b) of the Income Tax exempts home loan interest payments from taxes.

Up to Rs 2 lakh in tax exemptions are available for house loan interest payments. The residence for which the loan has been obtained, regardless of whether you now reside there or not. You won't, however, be eligible for the tax deduction if you rented that residence.

Real estate demand will rise.

Middle-class homeowners will have more money to spend if their home loans are free from taxes, and this will encourage others to purchase homes as well. "Demand is necessary for growth in the sector, and the demand will increase only when the taxpayers are given some benefit in tax exemption," says Manoj Gaur, Chairman of CREDAI. The interest rates on house loans have been rising steadily as a result of the rise in repo rates. There has been a noticeable rise. It is unlikely that housing demand would rise even if they stay constant. Consequently, the government will only be able to exempt taxpayers. The industry can only pick up steam after that.

How to get a house loan exemption from taxes

Tax reduction is offered on house loan payments under Section 24 of the Income Tax Act. EMI is divided into two sections. There are two parts: the primary component and the interest part. Section 24(b) allows for a tax exemption of up to Rs 2 lakh on the interest part of a financial year. The major part is eligible for the deduction under section 80C, with a cap of Rs 1.5 lakh.