Houses costing less than Rs 45 lakh can get the benefit
Finance Minister Nirmala Sitharaman enhanced the deduction limit permitted for interest payment against a loan for self-occupied house property to Rs 3.5 lakh from Rs 2 lakh currently. However, the increase is proposed for only an affordable house valued up to Rs 45 lakh. This additional benefit of Rs 1.5 lakh would be given provided the loan is taken in the period from April 1, 2019 to March 31, 2020.
So, if the enhanced deduction is considered, then the total tax benefit that a person gains for a self-occupied house property would shoot up to Rs 5 lakh (Rs 1.5 lakh for Section 80 C principal payment and Rs 3.5 lakh for interest deduction).
Apart from this move, she also proposed to provide capital gains exemption from profits earned by selling residential house by investing in start-ups. This would be permitted only up to March 31, 2021."The assessee who has sold a property needs to invest the capital gains amount earned from sale of property within a year from the sale or before the due date of filing returns. It doesn't end there. The start up too needs to invest the amount in machinery and other specified areas within a year from which the amount has been invested in the start-up, to claim the benefit of Section 54 G," claims Dr Suresh Surana, founder of RSM India.