India Budget ’14 makes buying a home easier for you
With ample tax incentives announced in this year’s union budget, has the government finally taken a step towards making the dream of owning a home easier to achieve for the common man?
The whole country waited with bated breath for Finance Minister Arun Jaitley to deliver the Union Budget 2014 on Thursday. While there were quite a few misses as far as the real estate sector was concerned, it hit the bull’s eye as far as the tax exemptions are concerned.
The announcement to increase the income tax deduction limits under 80C, of which the repayment of principal on housing loans is a component, has bought a sigh of relief to several prospective home buyers. This limit has been raised from Rs 1 lakh to Rs 1.5 lakh. Additionally, the budget has also increased the deduction limit on interest payment for housing loans from Rs 1.5 lakh to Rs 2 lakh.
“These two factors alone will lead to a vastly improved sentiment on the housing markets,” exclaims Anju Puri, country head, Jones Lang Lassale. This indeed would improve buyer sentiments as the budget has managed to address a key demand of the buyers.
More than 20 per cent of the buyers were expecting a higher tax rebate on loan repayment from this year’s budget, as per a recent pre-budget survey conducted by Magcbricks.
Thus, these measures would greatly reduce the burden of EMIs on the common man making the process of purchasing a home less expensive. Navin Raheja, chairman, Naredco and Assocham explains, “A person who pays an approximate amount of Rs 30,000- 35,000 per month as EMI would get almost full deduction of EMI from income tax and thus the effective interest burden will be less.”
Further, the budget also increased the general income tax exemption from Rs 2 lakh to 2.5 lakh and 2.5 lakh to 3 lakh for senior citizens. “This would help in generating more disposable income for families and would enhance property buying in the country. This would also have implications on one’s ability to service home loans,” adds Raheja.
Thus, the drop in actual transactions in the real estate market that was being witnessed in the last few quarters may just revive now. We would have to still wait and watch if the actual buying across countries would pick up or not!
Source Times of India Magicbricks.com Bureau