The Union Finance Minister P Chidambaram proposed to allow an additional tax deduction of Rs 1,00,000 on interest rate for home loans upto Rs 25 lakh. The Union Budget 2013 aimed to give more boost in low cost housing segment. Real estate industry was expecting the following from Budget 2013.
The additional tax deduction on home loans is expected to boost demand for affordable housing. The budget also announced that the additional tax deduction can be carried forward to the next year by these borrowers, in case the limit is not exhausted in the current year.
Given the state of the economy and the compulsion of boosting overall economic growth, we were expecting measures which would bring incentives to the Real Estate sector & the end buyer, by way of easier financing norms or benefits of tax deductions.
Finance Minister's decision to grant an additional tax deduction of interest of up to Rs.1 lakh for a person taking the home loan up to Rs.25 lakh for the first time during the financial year 2013-14. The move will help promoting the Real Estate sector and will also widen employment opportunities for many in the construction sector.