Home Loan Interest and Principal Deduction Rules Under Section 24 (B) and Section 80 C - Here are recommendations made by FICCI
FICCI has also suggested the government to relax the conditions for claiming deduction under Section 80 -IBA.
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 recommended the Central government to either remove the limit for deduction of interest on housing loan under Section 24(b) or increase it from Rs 200,000 to Rs 10,000,000.
In its Budget recommendations, FICCI also suggested the government that the deduction of principal amount of housing loan repaid should not be clubbed with other deductions under Section 80C. It said that the deduction should be allowed as a deduction separately over and above the limit of Rs 1,50,000 under Section 80 C. Alternatively, the limit under Section 80C should be increased to Rs 3 lakh, FICCI suggested.
Explaining the reason for above recommendations, FICCI said: “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 industry body has also suggested the government to relax the conditions for claiming deduction under Section 80 -IBA.
Remove limit on carpet area
Currently, the limit on carpet area of shops and commercial establishments is restricted to 3% of the aggregate carpet area. Also, the project shall be deemed to have been completed when a certificate of completion of project as a whole is obtained in writing from the competent authority, as per Section 80-IBA. FICCI suggested that the above limit 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 suggested 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.