For loans upto ₹50 lakh, interest subsidy should be raised, says Atul Monga of Basic Home Loan

livemint.com:

MintGenie, Monga said that reviving expired incentives, such as tax breaks, is crucial for affordable housing. As Budget 2024 approaches India’s real estate scenario amid an upcoming election year, the focus is on potential changes to home loan interest rates under Section 24 of the Income Tax Act. Currently capped at ₹2 lakh, experts suggest raising the limit to at least ₹5 lakh.

This adjustment is crucial for revitalizing the budget housing sector, which has seen a decline in demand. The proposed increase in deduction has the potential to boost the market, encouraging potential homebuyers to invest in affordable housing. Additionally, stakeholders anticipate the introduction of tax deductions for first-time homebuyers, making property acquisition more attractive and revitalizing the overall housing market for sustained growth.

Prospective homebuyers could experience significant benefits if the government implements recommended changes in home loan interest rates. Increasing the Income Tax Act Section 24’s home loan interest rate rebate from ₹2 lakh to ₹5 lakh would likely stimulate the housing market. This adjustment, coupled with measures such as reducing repo rates and offering tax holidays to developers, could attract genuine homebuyers and boost demand.

The proposed changes may particularly benefit affordable housing homes, which faced a 20% decline in sales in 2023 due to the pandemic. Reviving expired incentives, such as tax breaks, is crucial for affordable housing. Modifying eligibility criteria based on income, property size, and price, in alignment with the Ministry’s definition, is recommended.