NEW DELHI: Real estate body NAREDCO has sought further rationalisation of taxes, focus on affordable housing and liquidity measures for the sector in the upcoming budget. Rajeev Talwar, chairman, NAREDCO said on Thursday that interest on housing loans should be fully allowed under Income Tax Deduction without any ceiling.
"The current limit of interest deduction under Section 24 of IT Act 1961 on housing loan of Rs 2 lakh should be removed to incentivise home buyers and spurring overall demand. Also, loss from house property should be fully allowed to be adjusted against other heads of income. In case of unadjusted loss, it should be fully allowed to be carried forward to subsequent years," he said.
The Reserve Bank of India, through a notification in 2017, allowed a loan to-value ratio (LTV) of up to 90 per cent for home loans for affordable houses of Rs 30 lakh or less. Same facility should be permitted for other housing including Middle Income Group (MIG) and Higher Income Group (HIG) as well, added Talwar.
According to Naredco, two segments of housing - rental and affordable - need impetus in this budget. For rental housing, enhancement in HRA Tax Exemption; an increased depreciation rate for the rental projects like in commercial buildings and allowing carry on of loss from rental income will make a difference.