I-T relief on home loans may go up

Home loans may become more affordable as the government may increase income tax deduction to Rs 2 lakh for specified investments under section 80C of Income Tax Act and also expand its ambit for investments under ‘Make in India’ and ‘Startup India’.

At present, the income tax deduction of Rs 1,50,000 is given for specified investments under section 80C that includes life insurance premiums, home loan principal repayment, public provident fund and equity-linked saving schemes.

“Interest on home loans are also expected to come down significantly in order to give boost to Housing for All by 2022,” according to sources in the industry.

The deduction for interest on housing loan of a maximum of Rs 2 lakh for one self-occupied house property could go up to Rs 3,00,000.

Finance Minister Aurn Jaitley in last year's Budget had expressed the government’s commitment to progressively lower taxes and bring in better tax administration in line with the government’s theme of bringing in ‘acche din’.

No significant increase
However, any significant increase in personal income tax exemption limit may not be possible in the wake of a large outgo towards 7th Pay Commission and One-Rank-One–pension (OROP) awards in 2016-17. Industry body Assocham, however, has demanded a raise in exemption limit to Rs 4 lakh from the current Rs 2.5 lakh for all individual tax payers.

However, the deduction of Rs 15,000 under section 80D for payment of medical insurance premium may be increased to Rs 40,000 instead of a popular demand for Rs 50,000. Sources said interest on education loans are also expected to come down.