Indian Budget : Several Benefits Just for First Home Buyers

To boost the demand of homes and real estate, the Modi government has announced that the first-home buyers will get an additional deduction of Rs 50,000 on interest they pay for home loans up to Rs 35 lakh (for homes that are not priced more than Rs 50 la

To boost the demand of homes and real estate, the Modi government has announced that the first home buyers will get an additional deduction of Rs 50,000 on interest they pay for home loans up to Rs 35 lakh (for homes that are not priced more than Rs 50 lakh in any case). At present, a home buyer can claim a deduction of up to Rs 1.5 lakh on the interest they pay on loans they have taken for houses they live in.

The home buyers can also claim a tax deduction up to Rs 1,00,000 on the portion of the EMIs they pay towards principal repayment under Section 80C. It means that if you pay an EMI up to Rs 2.5 lakh in a year (Rs 1 lakh as principal and Rs 1.5 lakh as interest), you can claim tax deduction on in the IT return you file. Now, the limit has been increased to Rs 3 lakh.

The government has also allowed 100% deduction on profit for builders and real estate developers who are targeting affordable housing segment. Besides this, any Central or state government project as well as projects with public private partnership will be exempted from Service Tax for developing cheaper homes of up to 30 sq mt area in the four metro cities and up to 60 sq mt area in Tier II and Tier III cities.

While presenting the Union Budget 2016-17, Finance Minister Arun Jaitley said,