PUNE: In a bid to provide “Housing for All by 2022”, the government announced major tax benefits in the Budget to help stimulate demand for the affordable housing segment expected to attract first-time homebuyers in the country.
Interest deduction up to Rs 3.5 lakh for affordable housing priced upto Rs 45 lakh as against Rs 2 lakh earlier will now be available until March 31, 2020.
“For realising the goal of Housing for All and affordable housing, a tax holiday has already been provided on the profits earned by developers of affordable housing. Also, interest paid on housing loans is allowed as a deduction to the extent of Rs 2 lakh in respect of self-occupied property. In order to provide a further impetus, I propose to allow an additional deduction of up to Rs 1,50,000 for interest paid on loans borrowed up to March 31, 2020 for purchase of an affordable house valued upto Rs 45 lakh.
