March 21, 2016 10:30 am
Budget 2016-17: Brings Cheer for First-Home Buyers
Budget 2016-17
In today’s scenario where possession of the property within stipulated time is a challenge, Budget 2016-2017 proposes tax relief under Section 24 of I-T Act on interest payment on home loan if the property bought, or under construction, is completed within 5 years from the end of the financial year in which the loan was availed instead of the current 3 years. This could actually help save tax up to Rs. 60000.
In addition to above, Finance Minister Arun Jaitley has announced an additional interest deduction of Rs. 50,000 a year for loans up to Rs. 35 lakh sanctioned during 2016-17 provided cost of the house does not exceed Rs. 50 lakh.
Tax benefits in FY 2016-17 for home loan borrowers are summarized below:
| Tax Benefits | On Principal Repaid | On Interest Paid |
| First Home – Self Occupied | No change – Up to Rs. 1.5 Lakh (Rs. 2 Lakh for senior citizens) | Up to Rs. 2 Lakh if completed within 3 years from the end of the FY in which loan is taken, else Rs. 30,000. Additional exemption of up to Rs. 50,000 on interest paid for loans up to Rs. 35 lakh with cost of home up to Rs. 50 lakh |
| First Home – Rented/ Vacant | No change – Upto Rs. One Lakh Fifty Thousand (Rs. Two Lakh for senior citizens) if staying in a different city for work | No change – On entire interest paid without any limit |
