regular-article-logo Wednesday, 04 October 2023

Budget 2022: Centre may extend interest subvention scheme

Nirmala Sitharaman may also increase the tax benefits on home loan

R. Suryamurthy New Delhi Published 06.01.22, 02:12 AM
Nirmala Sitharaman.

Nirmala Sitharaman. File picture

The Centre may extend the interest subvention scheme to houses that cost Rs 35 lakh from Rs 25 lakh in the budget.

Finance minister Nirmala Sitharaman may also increase the tax benefits on home loan principal and interest.


Being one of the largest employers with its growth having a multiplier effect on other sectors. the realty sector is likely to get special attention in the budget, sources said.

The budget could increase the allocation under Pradhan Mantri Awas Yojana (PMAY) from Rs 27,500 crore in 2021-22 and putting the National Urban Rental Housing Policy on fast-track.

The cabinet last month extended the rural housing scheme till March 2024 to cover the remaining 1.5 crore of the total 2.95 crore houses under the scheme.

Anarock group chairman Anuj Puri said “there is a need to hike the Rs 2 lakh tax rebate on housing loan interest rates under Section 24 of the Income Tax Act up to at least Rs 5 lakh. This could kick-start healthier demand for housing, especially in the affordable and mid-segment categories.”

“Personal tax relief, either by a cut in tax rates or favourably readjusted tax slabs, would be favourable for the homebuyers.”

“Since the last increase in the deduction limit under Section 80C (to Rs 1.5 lakh a year) was in 2014 and an upward revision has been long overdue,” he added.

Industry veteran Niranjan Hiranandani, vice-chairman Naredco and managing director Hiranandani Group, said the budget should expedite last-mile funding by enhancing the amount of stress fund and increase the income tax deduction on housing loan to up to Rs 5 lakh.

Ashoo Gupta, partner, Shardul Amarchand Mangaldas & Co said, "There is an expectation of the introduction of new financing schemes and upgrading the existing ones such as the National Urban Housing Fund to address the liquidity crunch among developers, especially in the affordable and mid-housing segment.”

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