Amid high home loan interest rates and rising real estate prices, homebuyers expect a major policy reform in the upcoming Union budget 2024 --- including tax rebates and stringent enforcement of regulatory bodies like the Real Estate Regulatory Authority (RERA).
Homebuyers say the Section 80C limitations of Rs 1.5 lakhs should be increased to Rs 3 Lakhs.
Section 80C of the Income Tax Act of India is a clause that points to various expenditures and investments that are exempted from Income Tax.
Currently, the ceiling on the deduction for principal repayment of a housing loan is Rs 1.5 lakh.
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"Many are not able to claim the benefit of this deduction to the fullest considering the above limit and other available deductions under Section 80C. Deduction under Section 80C for principal repayment of housing loans should be increased from the existing limit of Rs 1.5 lakh," Confederation of Real Estate Developers' Associations of India (CREDAI) added.
More tax rebates
Homebuyers are also expecting an increase in tax rebate on interest paid on home loans, which will provide a further relief for home buyers, especially first-time buyers.
The present limit for deduction of interest on home loan under Section 24(b) of the IT Act is Rs 2 lakh for self-occupied property or rented property.
Rajiva Singh, president of the Noida Federation of Apartment Owners Associations, said, "One of the key expectations from this year's budget is to bring personal tax relief by increasing the tax rebate on home loan interest rates from Rs 2 lakh to Rs 5 lakh. This will provide relief for first-time homebuyers and also give a boost to the real estate sector."
CREDAI added that this move is beneficial as homebuyers lose the benefit of an interest claim that exceeds Rs 2 lakh, despite actual payment of the interest.
Additionally, homebuyers state that the building material costs continue to escalate, which ultimately increases real estate prices across the board. "Property prices in NCR are expected to increase in 2024. The government budget should consider revising the definition of affordable housing in terms of value and size," Singh said.
Stronger Regulatory Bodies
Speaking to Moneycontrol, Dhananjaya Padmanabachar, president of Karnataka Homebuyers Forum said, "The central government must allocate more budget for RERA Central Advisory Committee (CAC) to ensure stringent implementation of RERA in every state."
On January 25, Moneycontrol reported that the Karnataka High Court pulled up the state government for not filling the vacancy of Karnataka RERA Appellate Tribunal chairman --- thus leaving the body non-functional for the last 6 months.
"In Karnataka at least, KRERA orders take years, sometimes more than three due to short staffing at the state body department and slew implementation," Padmanabachar added.
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