Union BUdget had inserted a new section 80EE under which a home loan borrower is eligible to get additional Rs.1,00,000/- deduction over and above current limit of Rs.1,50,000/- under section 24. But there are conditions. One of them is the loan has to be sanctioned (mind you it is not disbursement) on or after 1st April 2013 and till 31st March 2014.
Home loan borrowers have stopped taking sanctions and all those who have applied for housing finance have requested bankers to give sanction letters only after 1st April 2013. Which means the funds will be late by one more month to real estate by home loan borrowers and purchasers.
Those who have recently been sanctioned are now going in for fresh sanction and will re-apply in month of late March so that they get the sanction letter after 1st April 2013 to availe additional benefit of Rs.1,00,000/- deduction.
All the 20:80 scheme will severely hit since pre-requisites of the scheme is to have sanction letter before giving 20% of the own part as booking amount.
The Finance Bill 2013-14 proposes additional tax benefit to the first – home buyer who takes a loan for an amount not exceeding Rs.25 lakh. Presenting the Union Budget in the Lok Sabha today, the Finance Minister Shri P.Chidambaram proposed that a person taking a loan for his first home from a bank or a housing finance corporation upto Rs.25 lakh during the period 1.4.2013 to 31.3.2014 will be entitled to an additional deduction of interest of Rs.1 lakh.
The Finance Minister hoped that this will promote home-ownership and give a filip to a number of industries like steel, cement, brick, wood, glass etc besides jobs to thousands of construction workers.
This deduction will be over and above the deduction of Rs.1.50 lakh allowed for self-occupied properties under Section 24 of the Income Tax Act. If the limit is not exhausted, the balance may be claimed in AY 2015-16.
Source : Accommodation Times News Services
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