New Delhi: Industry chamber Ficci has demanded that the Finance Ministry should introduce a separate deduction for home loan repayments for both principal and interest components in the upcoming union Budget 2022-23.
“Currently, the repayment of principal component of home loans is eligible for tax deduction under Section 80C whereas the repayment of interest component of up to Rs 2 lakh qualifies for tax deduction under Section 24B. However, with multiple investment options, small savings instruments, insurance policies, pension plans, etc crowding Section 80C, many home loan borrowers remain bereft of availing tax deduction on their entire home loan principal repayments,” Ficci said in its pre-budget memorandum.
Ficci has recommended that there should be a separate section for home loans repayment with a combined maximum deduction of up to Rs 5 lakh for both principal and interest components.
“Similarly, the upper cap on Section 24B becomes inadequate for a large number of home loan borrowers, especially in their initial years of their home loan tenure. Hence, there should be a separate section for home loans repayment with a combined maximum deduction of up to Rs 5 lakh for both principal and interest components. This would boost home buyers’ sentiment and thereby, increase demand in the housing industry,” said the industry body.
The dates of the Budget session are yet to be announced, though it is expected that Finance Minister Nirmala Sitharaman will present the Budget 2022-23 on February 1 as has been practised since a couple of years now.