| Real estate got a shot in the arm from finance minister P. Chidambaram in the budget for the next financial year, but it was mostly limited to affordable housing. He proposed a Rs.2.5 lakh deduction on the total taxable income on home loans less than Rs.25 lakh. The deduction is applicable on loans from banks and non-banking financial companies (NBFCs).
Currently, the deduction on interest payment of home loans is Rs.1 lakh, irrespective of the amount. With this proposal, a Rs.25 lakh home loan will get a total tax deduction of Rs.2.5 lakh on interest payments. Property analysts tracking the real estate sector said that this would offer a welcome impetus to budget housing, first-time home buyers and to some extent, boost demand in smaller cities and the distant suburbs in metros...............................................Full Article: Source
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