Get extra tax exemption on your first home loan

The Finance Bill 2016, which is expected to be approved by Parliament during the ongoing second half of the Budget session, provides for up to Rs 50,000 tax benefit on housing loans up to Rs 35 lakh taken for first residential property. The proposal aims to promote the government’s ‘housing for all’ scheme and strengthen the real estate sector which is facing a massive slowdown for last three-four years.

The Bill, which was presented by the FM Arun Jaitley read, “In furtherance of the goal of the Government of providing ‘housing for all’, it is proposed to incentivise first-home buyers availing home loans, by providing additional deduction in respect of interest on loan taken for residential house property from any financial institution up to Rs 50,000.”

After the Finance Bill is passed by Parliament, the amendments in this regard in the Income Tax Act will take effect from April 1, 2017. This incentive is proposed to be extended to a house property of a value less than Rs 50 lakh and a loan not exceeding Rs 35 lakh has been sanctioned during the period from April 1, 2016 to March 31, 2017.

, “the tax incentive will encourage first-time home buyers and increase the demand for housing significantly,” Realtors’ apex body CREDAI Getamber Anand said

The proposed deduction is over and above the limit of Rs 2 lakh provided for a self-occupied property under section 24 of the I-T Act.