The Budget is round the corner. It’s again that time of the year when expectations get built up for lollies that would be doled out.
Exemption limit for interest:What about the interest component of the home loan? There is a soft corner for home buyers and they may find this Budget friendly. There could be a raise in exemption limits for interest from Rs 1.5 lakh to say Rs 2-2.5 lakh.
This may be a prelude to kick off the withdrawal of the stimulus as a sop like this could be expected to prop up the property mart and keep the momentum going, despite withdrawal of stimulus. Since real estate sector has deep linkages to scores of sectors, it may make sense to prop it up. Increasing the limits here would hence be a master stroke. I will be surprised if the finance minister does not raise the limit here.
Full exemption?Government’s professed intention is to provide shelter for all. In line with this and in view of the huge escalation in the cost of housing, the finance minister should consider giving full exemption to the interest component of the loan, in a year, much like it is done in for education loans.
Simplified formula for the rent paid:Rent paid by an individual is now subject to the one-in-three formula. It can be simplified to just one standard figure, which could be say 3% of the average (property) price in an area.
For instance, the approved rates forsay Andheri (a suburb of Mumbai ) is between Rs 7,000 - Rs 15,000 psf, then the average comes to Rs 11,000 psf. For a 1000 sq ft area home, the rental for a year would come to Rs 3.3 lakh. Any other formula which is simple to understand and adhere should be fine too.
To read more, please, visit Budget unlikely to tinker with the tax exemption limit
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