NAREDCO Proposes Rs 5 Lakh Home Loan Interest Tax Exemption Limit Increase

By: Admin
July 18, 2024
Categories: Income Tax News|News
4 Min Read

Boosting Housing Demand: NAREDCO Calls for Rs 5 Lakh Tax Exemption on Home Loan Interest

In a bid to stimulate the housing market amidst soaring property prices and mortgage rates, NAREDCO, the realtors’ body, has proposed significant changes ahead of the upcoming budget. Currently, under Section 24 of the Income Tax Act, the deduction on interest for self-occupied properties is capped at Rs 2 lakh annually. NAREDCO suggests raising this limit to Rs 5 lakh to alleviate financial burdens on homebuyers and developers alike.

The association emphasizes that such measures are crucial to bolstering housing demand, which has seen fluctuating trends across major cities. Builders echo this sentiment, advocating for additional tax incentives to promote the supply of affordable housing units. They also urge for revisions in taxation policies related to property held as stock-in-trade, proposing an extension of the nil taxation period from two to five years.

President of NAREDCO highlights that these recommendations, if implemented, would not only provide relief to developers facing market challenges but also invigorate overall demand in the housing sector. The Chairman & MD of Sterling Developers adds that alongside tax relief, streamlined project approvals and single-window clearances are essential for industry growth.

Industry experts underscore the need for broader reforms in the upcoming budget, including adjustments in tax slabs and the introduction of interest subsidy programs for potential homebuyers. They stress revitalizing both demand and supply in the affordable housing segment, crucial for sustained sectoral growth.

To further enhance supply, suggestions include leveraging government land banks through partnerships with private developers, offering land and capital at concessional rates. Tax incentives for developers engaged in affordable housing projects are also proposed to stimulate activity in this critical sector.

In conclusion, stakeholders call for decisive governmental action to grant industry status to the real estate sector, raise tax exemption limits on home loan repayments, and introduce policies aimed at long-term growth and job creation. These measures, they believe, will not only revive the housing market but also drive economic prosperity across ancillary industries.

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