Each year, with the announcement of the union budget, both home buyers and the realty sector look forward to beneficial reforms and rebates. While the sector has witnessed a steady growth in demand post-pandemic, the budget this year focused on giving a further boost to the potential home buyers. So, with the union budget 2022, real estate industryand prospective buyers were graced with a range of measures.
From faster approvals for affordable housing under the PMAY scheme to tax benefits on home loan, union budget 2022brought many benefits. Listed below are five of them.
Boost to PMAY scheme
The union budget for 2022 primarily focused on affordable housing. To achieve the target of housing for all, the finance minister has allocated a further fund of Rs. 48,000 crores. The allocated funds will ensure the completion of around 80 lakh houses for beneficiaries this year.
Furthermore, the government will identify an additional 60,000 eligible beneficiaries for houses in rural and urban areas. This will also ensure a boost in housing demand from potential buyers.
Tax deduction on joint property
If you are planning to buy a house this year, it will be beneficial to do so jointly with a family member or your spouse. Because with a joint home loan, you both will be eligible for a deduction of Rs. 2 lakhs on the interest payment. Moreover, if you are a first-time homeowner, you are also eligible for an additional tax deduction of Rs.1.5 lakhs on the interest payment. This could lead to substantial savings for you.
Additional Read – Your Guide to Finding the Best Home Loan Scheme in 2022
Tax benefits on loan
If you take a loan from a friend, private lender, or employer to finance your purchase, you are still entitled to a tax deduction on the interest amount. To avail the incentives, you’ll need to present a certificate from the lender. However, remember that this tax benefit is applicable only on interest amount and not principal.
Extension in additional tax benefits
Under section 24 of the IT Act, you are eligible for income tax deductions on home loan interest rates payable up to Rs. 2 lakhs. Now, the government has extended an additional tax deduction of Rs. 1.5 lakhs (under section 80 EEA) on interest paid for one more year. You can now avail of a total tax benefit of up to Rs. 3.5 lakhs till March 31st, 2022.
Savings on under-construction properties
If you purchase a currently under-construction apartment, you can save a lot with a range of tax incentives. Under the IT law, you can claim the total tax benefits on interest paid during the construction period in five equal instalments. You can avail of this deduction starting from the year you received possession of the apartment. You’re allowed a maximum deduction of up to Rs. 2 lakhs on a self-occupied property.
Additional Read – Reasons Why Budget 2022 will be Focusing More on Affordable Housing
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