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Each year we wait with bated breath for the Union Budget to throw up pleasant surprises that will put more money in our pockets to enable us to live a comfortable life and plan for the future. This year too, you as a homebuyer must be looking forward to a Budget that holds promise. Because government policies can greatly impact our quality of life.
As a homebuyer, here are some key expectations from the Budget 2021-2022 to be presented on February 1, 2021:
Higher tax rebate on interest payment
Most homebuyers opt for a housing loan to finance their dream home purchase. And what makes the whole process sweeter is the tax benefit on the payment of home loan interest under Section 24 of the Income Tax (IT) law. If the property does not generate the income – in the case of a self-occupied or a vacant house, the borrower can claim a deduction of up to Rs 2 lakhs on the home loan interest paid in a financial year under this section. Since home loans have long repayment tenures – a large part of which goes in repaying the interest component of the borrowed capital – it is prudent that the deduction limit under Section 24 is extended to at least Rs 5 lakhs a year to create further demand for affordable and mid-segment property.
Timeline extension for first-time homebuyers
Under Section 80EEA of the IT Act, first-time homebuyers are eligible for additional tax benefits of Rs 1.50 lakhs per annum, on the interest component of home loans if they invest in affordable homes worth up to Rs 45 lakhs. With a view to achieving the target of ‘Housing for All by 2020’, the government had announced the interest deduction under Section 80EEA for loans taken during the period between April 1, 2019, and March 31, 2021. This means a homebuyer who avails a home loan after March 31, 2021, will not be eligible for a tax deduction. Hence, homebuyers now want this period to be extended to March 2022.
Tax benefit on the second home
Presently, if you own two houses, you can claim tax benefits only on one as self-occupied, while the other will be considered as rented out property. The notional rent on the second house will be added to your income and will be taxed as per the applicable tax slab. However, you will be allowed to deduct the interest on the home loan from the notional rent. If the Budget factors in tax benefit on a second home, it will encourage more second-home buyers and boost real estate investments.
Extending the cap under Section 80C
Section 80C covers deductions on home loan principal repayment under its overall deduction limit of Rs 1.50 lakhs a year. The real estate body CREDAI has suggested that the deduction limit under Section 80C, for principal repayment on home loans, be increased, to make the provision more exhaustive. The suggestion recommends that Stamp Duty and registration charges for property purchase also be included as deductions under this section.
GST waiver for under-construction homes
The present GST rate on under-construction properties is 5% minus the (Input Tax Credit) ITC benefit for premium homes (>INR 45 lakh) and 1% for affordable homes (
PMAY credit scheme extension
Homebuyers in the mid-income bracket desire the extension of the deadline for the PMAY’s credit-linked subsidy scheme (CLSS) for the mid-income category till March 31, 2022. It has already extended the deadline for the economically weaker sections (EWS) and the low-income group (LIG) categories to avail of the scheme benefits.
Increasing rental income set-off losses limit
Many owners of rented property suffered huge losses during the pandemic when tenants vacated the houses to return to their own homes. Several such landlords who had borrowed housing loans to buy the houses to rent out and earn income from rentals did not earn any income and could not repay their EMIs. Section 71 of the IT law prescribes setting-off of losses from house property under other heads which include income from salary, income from other sources, profit and gains of business and profession and capital gains. The unadjusted losses under other heads could be carried forward for 8 years, after the year in which the loss occurred. Post this, the set-off is permitted only under the head ‘income from house property’. However, the amount that could be set-off against other heads had been capped at Rs 2 lakhs per year for all sorts of properties, self-occupied or rented. Hence, homeowners would desire to increase the limit for set-off of losses to Rs 5 lakhs.
A lot of hope rides on the Finance Ministry to give homebuyers a friendly Budget 2021-22 to foster our dreams of buying that forever home to call our own.
HM Showers Offers on Prospective Home Buyers
As established here, it only makes sense to invest in an apartment as soon as possible. We, at HM, understand that the pandemic may have impacted the businesses and jobs of our prospective clients. Thus, we have announced a brand new home-buying scheme for the last 30-odd apartments at HM Indigo so that you no longer have to delay owning your dream home!
The unique scheme lets you book any of our spacious units of your choice at a token amount of Rs.10,000 only. Since the units are ready-to-move, you can finish up the formalities and move into an apartment of your own in just 10 days. What’s more, once you move in, you can let HM take the burden of your EMIs! The EMI Holiday Facility lets you postpone your EMIs by 10 months so that you may enjoy your stay at HM Indigo for nearly a year before you start paying the EMIs.
So, stop worrying about your monthly rental and book an HM Indigo apartment today.
Call us at 8880225555 for a home tour, today.