NAREDCO Advocates for Increasing Home Loan Interest Tax Exemption to Rs 5 Lakh

NAREDCO recommended increasing the tax exemption on interest for self-occupied property loans to Rs 5 lakh in the upcoming budget, up from the current Rs 2 lakh, to boost housing demand amidst rising prices and mortgage rates. Additionally, builders called for tax incentives to enhance the demand and supply of affordable homes. NAREDCO highlighted that Section 24 of the Income Tax Act limits the deduction on interest for loans on self-occupied properties to Rs 2 lakh.

The realtors' association pointed out that currently, properties held as stock-in-trade and not rented out are valued at zero for up to two years after the construction completion certificate is obtained. Beyond this period, the notional income from these properties is subject to taxation. NAREDCO suggested that real estate developers holding unsold stock due to weak market conditions should be exempt from this provision. They recommended extending the time limit from two to five years before the notional income from such properties is taxed.

The President of NAREDCO stated that if these recommendations are implemented, they will offer crucial relief to developers and boost demand in the housing sector.

By LNN (Liyaans News Network)