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Construction Planning & Management

 

Should there be more deduction in housing loans?

Created by : Pragya Kothari, Construction-Heavy, DLF  | 02 19 2010 11:41:43 +0000
Industry : ConstructionFunctional Area : India(Markets)
Keywords : housing loans deduction
Activity:  167 views;  last activity : 07 06 2010 20:18:09 +0000

In the economic slowdown process, one of the worst hit sectors has been the construction/realty sector. Not only did various projects get delayed and employment opportunities dried up, the very confidence of an individual/household was also shaken in terms of buying a house property.

In this context, the deductions available under Income-Tax Act 1961 in respect of housing loan could play a significant role and act as stimulus from a macro economic perspective. Currently, there are two deductions available under the Act.

These include deduction for interest paid on housing loan for a self-occupied house property up to Rs 1.5 lakh, subject to fulfilment of conditions. Secondly, deduction up to Rs 1 lakh could be claimed u/s 80C for repayment of the principal amount of the housing loan.

So users, do you think there shall be more deduction in housing loans?

  
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I think the current increase in deduction in housing loans should continue further for repayment to at least Rs 3 lakh each. An enhanced tax deduction should be encouraged more and more individuals should come forward and purchase houses which should trigger demand for new (and to some extent old as well) houses.
By Pragya Kothari, Construction-Heavy, DLF  02 19 2010 12:21:16 +0000
 
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In the above deductions is that an individual in employment could provide the necessary details to his employer and claim necessary relief against tax payable on salary income. Thereby, he can reduce his tax liability on his salary income at the tax deduction stage itself. So I don't think any more deduction in the housing loans is necessary
By Swati Raut, Product Manager, Aviva  02 19 2010 11:44:10 +0000
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there should be more deductions because the cost of owning a house has gone up and secondly only salaried persons ask for deductions mostly. So leave the poor and honest and let us find some other source to catch the tax evading blue whales.

Let the construction and related activities go in full swing creating a boom in the service sector and industry like cement and steel and other construction materials flourishing the economy as a whole
By Winsome Thomas, Agency Manager, MetLife Insurance Co  | 02 22 2010 17:43:55 +0000
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yes, their should be more deduction on housing loans due to the downfall of the land rates and low income
By mudassir , Freelancer, Freelancer  | 02 21 2010 13:34:23 +0000
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Since you say the rule was of 1961 origin and the maximum is around 1.5 lakhs shows that it is meant for a big house of the Mansion type of those days. In todays purchasing power it will translates to more than a few crores of rupees and it will be absurd to think that the governments today will follow the same ethics followed in the 60's to draw out a deduction based on todays purchasing power.

I also think that the present government is forecefuly dipressing asset prices on what they saw abroad in US and Japan. So they msy not do anything against their own calculations regarding asset prices.
By Mathew Cherian, Research Associate/Analyst, Western Michigan University  | 02 19 2010 18:11:58 +0000
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The realty sector is badly hit due to the hit taken by the IT sector, the maximum investment came from people working in the IT Sector.  To encourage people from non-it sector it is necessary that the deduction on account of housing should be increased and also to solve the problem of housing, employment.
By kanukurthy sudershanrao, Operations Manager, Andhra Bank  | 02 19 2010 16:09:23 +0000
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