In a bid to boost housing demand and offer relief to taxpayers, the Centre may offer higher tax deductions on home loans in the upcoming budget, report said.
Finance Minister Nirmala Sitharaman may increase the annual tax deduction limit on principal payment of housing loans under Section 80 C of the Income Tax Act, Mint reported quoting two officials familiar with the development.
Currently, the limit is capped at Rs 1.5 lakh which can be raised to Rs 2 lakh in the Budget next month.
Recommending tax incentives on both the supply and demand sides for the real estate sector, property consultant Knight Frank India said the government could drive investor interest in housing by offering a separate annual tax deduction of Rs 150,000 for principal repayment, Moneycontrol reported. Without such incentives, consumers could be indifferent to house purchases, the property consultant said.