Home Loan Interest and Principal Deduction Rules Under Section 24 (B) and Section 80 C: The Federation of Indian Chambers of Commerce and Industry (FICCI) has suggested the Central government to either take away the limit for deduction of interest on housing loan beneath Section 24(b) or enhance it from Rs 200,000 to Rs 10,000,000.
In its Budget suggestions, FICCI also recommended the government that the deduction of principal quantity of housing loan repaid really should not be clubbed with other deductions beneath Section 80C. It stated that the deduction really should be permitted as a deduction separately more than and above the limit of Rs 1,50,000 beneath Section 80 C. Alternatively, the limit beneath Section 80C really should be enhanced to Rs 3 lakh, FICCI recommended.
Explaining the purpose for above suggestions, FICCI stated: “Most of the salaried people buy a home by taking a housing loan and use their hard earned money to pay such loan. These deductions will increase their purchasing power and boost the real estate sector as well as the economy.”
The sector physique has also recommended the government to loosen up the situations for claiming deduction beneath Section 80 -IBA.
Remove limit on carpet region
Currently, the limit on carpet region of shops and industrial establishments is restricted to 3% of the aggregate carpet region. Also, the project shall be deemed to have been completed when a certificate of completion of project as a complete is obtained in writing from the competent authority, as per Section 80-IBA. FICCI recommended that the above limit really should be relaxed to say that “if the limit as per the relevant competent authority of the jurisdiction is more, then that limit should apply.”
It also recommended that if “there are different phased in the project, the the period of completion of 5 years should be eased on the start of each phase.
In justification of the above suggestion, FICCI said, “If the carpet area of shops and commercial establishments based on the requirement of the relevant competent authority of the jurisdiction is more than the limit of 3% of the aggregate carpet area prescribed, then there is a difficulty in going ahead with the affordable housing project.”
“In case of development of affordable housing project on a big parcel of land consisting of various buildings, it will be difficult to complete the entire project as a whole within a period of 5 years. Generally, such huge projects are divided in phases. In such case, the time period of completion for each phase should be 5 years. Accordingly, the 5 years period should start from taking of all approvals for a particular phase,” it added.