Budget 2012: Increase tax benefits on housing loans, says DTZ
Principal repayments should be treated as a separate tax exemption entity and excluded from benefits under section 80 C.
By Agencies | Updated:
NEW DELHI: An individual is entitled to claim both the interest and principal components of home loan repayments for tax benefits.
However, the ceiling under tax benefits is capped at INR 150,000 towards the total interest payable on the home loan (under Section 24 of Income Tax Act, 1961) and INR 100,000 for principal paid. The ceiling of Rs 100,000 under Section 80 C is less, particularly when home loan principal repayments are clubbed with other tax saving instruments.
Suggestion:
>> Principal repayments should be treated as a separate tax exemption entity and excluded from benefits under section 80 C.
>> Deductions towards the total interest payable on the home loan should also be increased from existing cap of Rs 150,000.
>> The above benefits will stimulate end user demand, particularly for mid-range housing.
However, the ceiling under tax benefits is capped at INR 150,000 towards the total interest payable on the home loan (under Section 24 of Income Tax Act, 1961) and INR 100,000 for principal paid. The ceiling of Rs 100,000 under Section 80 C is less, particularly when home loan principal repayments are clubbed with other tax saving instruments.
Suggestion:
>> Principal repayments should be treated as a separate tax exemption entity and excluded from benefits under section 80 C.
>> Deductions towards the total interest payable on the home loan should also be increased from existing cap of Rs 150,000.
>> The above benefits will stimulate end user demand, particularly for mid-range housing.
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