While the Indian Government has certainly offered various incentives to home buyers over the years and other factors like low interest rates and stable prices make home buying more conducive currently, experts advocate more tax breaks in the 2022 Union Budget for spurring demand and helping put more money in the hands of buyers who have struggled with high inflation and negligible income increases in the last two years.
Many industry stakeholders advocate an increase in the deduction amount under Section 80C which applies for home loan principal repayments while some feel that a separate deduction may be announced for home loan principal repayment under Section 80C. Some also want the deduction of Rs. 2 lakh on interest repayments under Section 24 to be enhanced. Kanika Gupta Shori, the COO and Co-Founder at Square Yards, feels that with PPF, PF, life insurance and other investments already covered under Section 80C, middle-class taxpayers often exhaust most of the rebate on these avenues with limited room for claiming rebates on principal repayments. She advocates a separate deduction of Rs. 1.5 lakh on home loan principal repayment under Section 80C for sparking higher interest in purchasing homes. She also feels that the Government should hike the interest repayment deduction threshold to Rs. 5 lakh under Section 24 for lowering the tax burden on home buyers and help them fulfill their home ownership dreams.
Many experts also feel that the Government should revisit the definition of affordable housing and change the price threshold to at least Rs. 85 lakh in a city like Mumbai and Rs. 60-65 lakh in other top Indian cities. This will help more buyers come under this segment, getting 1% GST rates, tax deductions up to Rs. 3.5 lakh on interest repayment (only available for affordable housing purchases) and other Government subsidies. This will convert more fence-sitters into home buyers after they have already struggled with various issues in the last two years according to many experts.
Square Yards is a technology-enabled, global real estate aggregator and India’s largest player for primary residential real estate. It’s subsidiary Square Capital is one of the largest marketplace for secured mortgages in India. Square Yards platform offers an integrated consumer experience & covers the full real-estate journey from search, discovery to research, transactions, home loans and post-sales service – fully integrating buyers to an extensive network of 500+ partner real estate developers, and 90+ banks & NBFCs. Square Yards is led by accomplished professionals, ex-bankers, and Ivy school alumni and is backed by the competence of more than 2500 employees in 30 cities and ten countries.