Finance Minister Nirmala Sitharaman on February 1 extended Rs 1.5-lakh benefit on interest paid on affordable housing loans by a year to March 2021. The Union Budget also gave tax holiday for another year to affordable housing developers.
“For realisation of the goal of ‘Housing for All’ and affordable housing, in the last Budget I had announced an additional deduction of up to one lakh fifty thousand rupees for interest paid on loans taken for purchase of an affordable house… In order to ensure that more persons avail this benefit and to further incentivise the affordable housing, I propose to extend the date of loan sanction for availing this additional deduction by one more year,” she said.
The date of approval of affordable housing projects for availing tax holiday, too, was extended by another year.
The Budget continues from last year the additional deduction of up to Rs1.5 lakh on interest paid on loans for house valued up to Rs 45 lakh. The total tax deduction stands at Rs 3.5 lakh,
The move could impact demand in the affordable-housing segment, said Shubham Jain, Group Head & Senior Vice President, Corporate Ratings, ICRA Ltd.
“Affordable housing and co-living are two sides of the same coin. The Budget further strengthened the commitment of government to these ventures,” said Arnab Ghosh, National Director, Design & Build and Fitouts, at Colliers International India.
Affordable housing continues to be the government’s focal point for real estate, said Anuj Puri, chairman, ANAROCK Property Consultants, talking about the extension.
The homebuyers can avail the benefit under section 80EEA. From April 1, the relief will be available for loans sanctioned till March 31, 2021.
“It will significantly benefit first-time homebuyers who will enjoy the benefits of interest subvention under the CLSS scheme and extended tax benefits,” said Ramesh Nair, CEO & Country Head, JLL India.
Developers get until March 2021, under section 80IBA, to claim 100% tax deduction for affordable housing projects. “This extension in the dateline will ensure continued interest of developers for the construction of affordable housing projects and help achieve the Housing for All objective of the government,” Nair added.
Source: Economic Times
