Big relief for home buyers! Now, claim additional Rs 1.5 lakh tax deduction on interest paid on home loans

Union Budget 2019: Finance Minister Nirmala Sitharaman gave a big tax benefit to homebuyers by announcing additional deduction of up to Rs 1.50 lakh for interest paid on home loans up to Rs 45 lakh, which means people will now get the total interest deduction of Rs 3.5 lakh on home loans.

The FM also said the step had been taken for realisation of 'Housing for All' goal and affordable housing. Also, interest paid on housing loans is allowed as a deduction to the extent of Rs 2 lakh in respect of self-occupied property, she said.

"In order to provide a further impetus, I propose to allow an additional deduction of up to Rs 1,50,000/- for interest paid on loans borrowed up to 31st March 2020, for purchase of an affordable house valued up to 45 lakh. Therefore, a person purchasing an affordable house will now get an enhanced interest deduction up to 3.5 lakh. This will translate into a benefit of around Rs 7 lakh to the middle class home-buyers over their loan period of 15 years," Sitharaman said in Parliament.

Housing has been an area of concern for middle and lower-middle class, said the FM, adding that the real domain sector also played a significant role in generating employment in the economy.

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