Budget 2024: Home buyers can get a gift in the budget, interest rebate can increase up to Rs 5 lakh

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budget 2024: Finance Minister Nirmala Sitharaman (Nirmala Sitharaman) is going to present the last budget of this tenure of Modi government on 1st February. Preparations for this interim budget are going on in full swing. Although the budget will be interim, it is nothing less than what people expect. The government can make announcements ranging from new schemes to tax exemptions to woo the middle class. Along with other sectors, real estate is also looking towards the government with hope. To promote affordable home buyers, the government can increase the tax exemption on home loan interest. Confederation of Real Estate Developers Association of India (CREDAI) has demanded that a rebate of up to Rs 2 lakh is currently given on home loan interest repayment. It should be increased to five lakhs. At present the interest rates of banks are quite high. In such a situation, home buyers can be encouraged by giving tax exemption. Knight Frank India had claimed in its report that last year there was a decline of about 16 percent in the sales of houses up to Rs 50 lakh in eight big cities of the country. In the report, the reason for this is the expensive rates of property and the expensive interest rates of banks.

Tax exemption is available under two sections of ITC

At present, any home buyer who has taken a home loan from any bank or NBFC is given an income tax exemption of up to Rs 1.5 lakh on payment of the principal amount. Stamp duty and registration fees spent by the borrower can also be included in this amount. It is worth noting that if you sell your house within five years, then the tax exemption you get for that year is added to the income of that financial year. At the same time, under Section 24(b) of Income Tax, tax exemption is given on payment of home loan interest. In this, tax exemption of up to Rs 2 lakh can be claimed, whether you are living in that house or the house is vacant. But if you have given your house on rent, that is, you are getting profit from it, then you will not get the interest under Section 24(b) of Income Tax.

Home sales decreased

According to a report by real estate consultant Knight Frank India, sales of residential properties priced at Rs 50 lakh and below declined from 1,17,131 units in 2022 to 97,983 units in 2023. Due to this, the share of affordable houses in total housing sales has reduced from 37 percent to 30 percent. The share of houses costing more than Rs 1 crore increased from 27 percent in 2022 to 34 percent in 2023. Shishir Baijal, Chairman and Managing Director, Knight Frank India, said that the housing market also achieved good growth in 2023 due to the shift towards more expensive properties. He said that due to the strong economic foundation of the country, the confidence of buyers to make long-term investments has increased. In 2018, the share of affordable homes in total residential sales was 54 percent. Sales of homes priced at Rs 50 lakh and below in Mumbai declined by six percent to 39,093 units in 2023, from 41,595 units in the previous year.

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