The National Real Estate Development Council (NAREDCO) has proposed a significant revision to the existing tax exemption limit on interest paid for housing loans, urging the government to increase it from INR 2 lakh to INR 5 lakh. This recommendation comes at a time when homebuyers are grappling with rising property prices and higher borrowing costs, prompting the real estate industry to seek measures that would not only provide financial relief but also stimulate demand in the housing market.
Currently, under Section 24 of the Income Tax Act, homeowners can claim a maximum deduction of INR 2 lakh annually for interest paid on loans for self-occupied properties. NAREDCO, however, argues that this limit falls short given the surge in housing costs and escalating interest rates, thus advocating for a five-lakh exemption. This adjustment, they contend, would not only ease the financial pressure on homeowners but would also serve as a critical incentive for potential homebuyers, particularly those in middle-income brackets. Industry leaders believe that such tax revisions are essential in driving housing demand, offering a much-needed boost to the sector during challenging economic times.
In addition to advocating for homebuyers, NAREDCO has called for tax reliefs for developers by extending the tax-exempt period on properties classified as stock-in-trade from the current two years to five years. This proposal is aimed at addressing the sluggish demand and market volatility faced by real estate developers. Industry experts stress that while tax exemptions are crucial, broader reforms, such as streamlining project approvals and granting industry status to real estate, would unlock further financial advantages and support sustained growth.
