Our economy is returning to the path of rapid growth. People have also started getting jobs. This may increase the demand for homes. If Finance Minister Nirmala Sitharaman announces some measures for home buyers in the budget, then it can bring shine to the real estate sector. Let us know about 5 such measures, which the Finance Minister can announce on 1 February. She will present the budget on February 1. This will be his fourth budget.
1. Facility of separate deduction on principal repayment
There should be a separate deduction facility on the principal repayment for those buying a home by taking a loan. At present, the facility of deduction on principal repayment is available under section 80 of the Income Tax Act, 1961. Since, this section covers many things like PPF, ELSS, Tension fee, there is not much scope for deduction on principal repayment. Therefore, for home loan customers, the facility of deduction other than 80C can be given.
2. Extend the duration of the Credit Linked Subsidy Scheme
Finance Minister Nirmala Sitharaman should extend the duration of the Credit Linked Subsidy Scheme (CLSS). It was available till March 2021 for customers falling in the MIG segment. This scheme is available for Economic Weaker Section (EWS) and Lower Income Group (LWG) till March 31, 2022. The benefit of this scheme should be extended to all income groups for at least one year. This will increase the demand for affordable homes. People will also find it easier to buy a house.
3. Extend the period of additional deduction under section 80EEA
Under Section 80EEA of the Income Tax Act, 1961, first-time home buyers get an additional deduction of Rs 1.5 lakh on the interest payment of the home loan. In the budget presented last year, this scheme was extended till March 31, 2022. Home loan interest rate is very low right now. Therefore, increasing this scheme will benefit a large number of home buyers.
4. Increase in set-off of loss from house property
The Finance Bill, 2017 had fixed a limit of Rs 2 lakh for set-off of loss from house property with any other income. Finance Minister Nirmala Sitharaman needs to remove this limit. This will greatly benefit the taxpayers. He will be able to claim full interest on his rented property without any limit. This will increase the post-tax return on the property purchased.
5. Under-construction projects exempted from GST
Now customers show more interest in completed projects. If under-construction projects are exempted from GST, customers will show interest in such projects as well. Options for more projects will also be available to them. Real estate companies will also benefit from this. The number of their vacant houses will decrease.
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