The Confederation of Real Estate Developers’ Associations of India (CREDAI) urged the government for a 100 per cent deduction on interest paid on home loans under the Income Tax Act to boost demand for affordable and mid-income housing.
The apex body for realtors also demanded that the definition of affordable housing be revised, with the price cap increased from Rs 45 lakh to at least Rs 75-80 lakh.
Also Read: Home Loan Tax Benefits
During a press conference on November 25, CREDAI President Boman Irani proposed that the government should apply a 1 percent GST rate on under-construction homes priced up to Rs 75-80 lakh to accelerate demand in the affordable and mid-income housing sector.
Currently, under-construction affordable homes priced up to Rs 45 lakh attract a 1 per cent GST rate, while homes above this threshold are taxed at 5 per cent, with developers unable to claim input tax credit.
Irani said that prospective homebuyers would benefit from lower GST if the definition of affordable housing were updated.
Also Read: best banks for home loan
CREDAI’s president-elect Shekhar Patel said there should be a 100 per cent deduction on interest paid on home loans instead of the current exemption of Rs 2 lakh.
Under Section 24 of the Income Tax Act, the deduction allowed on interest on loans for self-occupied property is limited to Rs 2 lakh.
