Budget Reactions: Rs 1-lakh loan deduction positive for realty sector: KPMG

Neeraj Bansal
KPMG India

"The Budget 2013-14 is likely to materialize the dream of many prospective first time home buyers with the proposed incentive to the home loan borrowers. As per the Budget a first time home loan up to Rs 25 lakh during the financial year 2013-14 will be allowed an additional tax deduction of interest of up to Rs 1 lakh. Accordingly with current interest rates hovering around 10% for the home loans, the (at current rates) entire year’s interest will be eligible for deduction within the extended limit of Rs 2.5 lakhs. This is likely to bring a dual impact – impetus to the growth of affordable housing segment and increase in employment opportunities in the construction sector."