Reduction on home loan interest payments should be increased to Rs. 5 lakh
Suggestions by NAREDCO in the context of the budget
The National Real Estate Development Council (NAREDCO) has suggested that the central government should take decisions that will further boost the real estate sector in the country. NAREDCO Chairman Heeranand emphasised the need to increase the flow of funds for affordable housing construction. He also requested that the deduction on housing loan interest payments be increased from Rs. 2 lakh to Rs. 5 lakh. He spoke to the media after attending a traditional pre-budget meeting with Union Finance Minister Nirmala Sitharaman. He highlighted the necessity to boost funding for affordable housing to promote the sector. He pointed out that the current tax deduction under the Income Tax Act for housing loans is limited to Rs. 2 lakh, which is insufficient and should be increased to at least Rs. 5 lakh.
Heeranand mentioned that this year is the first year in his over 40-year career where the growth of affordable housing has been negative. In this context, he suggested that focusing on the Prime Minister’s Awas Yojana scheme would be a way to encourage affordable housing. He also discussed the issue of capital gains tax on property purchases with the Finance Minister during their meeting. He explained that when selling one house and buying two, there is a capital gains tax exemption, but if one wants to buy three houses for their children, there is no exemption. He suggested to the Finance Minister that loopholes related to capital gains tax when buying a new house should be addressed.
