Home Buyers Benefited In Budget 2016

First-time home buyers have something to cheer about as Budget 2016 proposes to increase the deduction of interest by additional Rs 50,000 each year on Housing loans of Rs 35 lakh and below. However, Experts say that this benefit should have been extended for the entire middle-class.

Right now, Section 80EE in the Tax Act offers the deduction of Rs 1 lakh for any mortgage. This benefit was designed for two assessment years from April 1, 2014, and April 1, 2015. It is recommended to amend this provision to provide another deduction of Rs 50,000, to the home buyers seeking home loans in the financial year 2016- 2017. Means only those will get the advantage whose loan will be sanctioned after 1st April 2016 onwards.

The tax deduction is available for any kind of Housing loan whether for house or flat in group housing society. To get this benefit the home loan approved should not exceed Rs 35 lakh and the requirement for the home should not exceed Rs 50 lakh. Also, the assessee should not own any other residential house property round the date in the sanction of the loan.

Tax professionals condition this will not need to be limited to home loans worth Rs 35 lakh alone but should have been proportionally elevated for individuals. “That may have accomplished good results the entire middle-class, especially people who’ve bought houses in urban centers where purchasers might take Housing loans beginning at Rs 40 lakh so on up to crore,” states tax experts.