Tax deductions

Good news for home buyers! Higher tax deductions are likely on home loans in the 2022 budget

New Delhi: FM Nirmala Sitharaman is likely to offer higher tax deductions on home loans in the 2022 budget. According to the latest Mint report, steps are being taken to boost housing demand in the country. The government may increase the annual tax deduction limit for principal repayment of a home loan under Section 80C of the Income Tax Act. The current cap of Rs 1.5 lakh could be raised to Rs 2 lakh, according to the report.Also read – How to save income tax without using Section 80C? 10 tips here

This decision will come as an easing for taxpayers and will stimulate demand for housing. The report also quotes an expert saying that the deduction cap has not been raised since 2014 and there is a large demand for the same. Also Read – Budget 2022 expectations: Jewelery Council urges center to reduce import duties on precious metals

Under 80C, taxpayers are allowed to invest in various government schemes like the Public Provident Fund to claim tax deductions. The spike in spending due to the pandemic has led to the depletion of household savings. In addition, rising inflation has been a constant cause for concern. Also Read – After Winter Session, Crypto Bill Unlikely To Be Introduced In Budget Session Also

Earlier, according to the report, FM Nirmala Sitharaman announced new tax rules, but they were not accepted by most taxpayers.

Tax deductions can be increased by introducing a separate clause. As an additional benefit of Rs 50,000 National Pension Scheme contribution under Section 80CCD.

The report also indicates that the real estate sector should benefit from another incentive. It can be granted in the form of an additional interest deduction of ₹1.5 lakh on affordable one-year home loans until March 2023. In 2021, real estate in India saw an upswing in sales . Residential property sales are up more than 90% from pre-pandemic levels.