Budget 2017: Tax exemption on interest paid of home loans may increase

Union Budget 2017 may see an increase in deduction limit for interest paid on home loans by Rs 50,000, a report by Business Standard said on Wednesday.

The government may increase the deduction limit for the interest paid on a home loan to Rs 2.5 lakh from the earlier Rs 2 lakh in the upcoming Budget, the report added.

After PM Modi’s New Year speech that raised a slew of benefits which included affordable housing, the government will now be taking initiative to follow up with the interest rebates announced on small-ticket home loans.

The National Democratic Alliance (NDA) government, in its first budget, had raised the deduction on interest paid to Rs 2 lakh from Rs 1.5 lakh.

In its second budget, Finance Minister, Arun Jaitley allowed for an additional deduction of Rs 50,000 on interest on home loans, under section 80EE for first time home buyers.

The report quoted a senior government official who said, “Extending the time period of the Section 80EE deduction and increasing the threshold limit of the home loan up to Rs 50 lakh limit is also under consideration.”