Home Loans to Be the Best Saviors In Future

July 5, 2007	(1 votes, average: 4 out of 5)  Loading ...
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The story of rising interest rates on home loans is not new to ears of home buyers in India. Seeing the sector devoid of prospective customers nowadays, the government is encouraging people to invest in housing, complying with the policy initiatives being considered in the new direct tax code.

The code is likely to be a new substitute for prevailing income tax law.  The government is considering continuing some of the tax breaks given to individuals who buy home loans for building houses as ‘social welfare’ measure.

The concessions given for housing earlier have triggered activity in associated sectors thereby pushing taking national graph to a new high.

Currently, an individual can avail a tax benefit up to Rs 1 lakh each year on the principal amount paid on a home loan, says Section 80 C of the Income Tax Act.

There are tax breaks on the interest component of home loans as well, which is tax deductible.  A taxpayer can claim deduction of interest up to Rs 1.5 lakh on a home loan availed for a self occupied property.

Also, any interest paid on a home loan for a rented out property is also tax-deductible. All such benefits are now listed under different provisions in the income tax law.

The government may regroup these provisions soon while redrafting the legislation to make it user-friendly. Home loans may be taken out from the Section 80C, without disturbing the tax benefits as the loans for housing are non-financial instruments and are therefore required to be separated from financial instruments.

News Published Under:   Home Loans |