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GOOD NEWS For Home Buyers! Higher Tax Deductions Likely On Home Loans In Budget 2022

According to a new report, FM Nirmala Sitharaman is going to propose higher tax deductions on home loans in the upcoming Budget 2022. The reports from Mint states that this step is taken to boost the home demand in the country. The government will increase the annual tax deduction limit for repaying home loan principal under Section 80C of the Income Tax act. The report said that the current cap of Rs 1.5 lakh may be raised to Rs 2 lakh.

This decision will be a huge relief for taxpayers who have applied for home loans. The report also covered an expert who said that the deduction limit has not been raised since 2014 and there is a high demand for it.

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Under 80C, taxpayers are allowed to invest in various government schemes like PPF to claim their tax deductions. The high demand for expenses during the pandemic has led to little to no money for household savings; also the rising inflation is a constant worry.

Previously, FM Nirmala Sitharaman had announced new tax rules but they were not accepted by the people. The tax deductions can be increased by introducing a new clause, like an additional benefit of Rs 50,000 towards the Pension Scheme under Section 80C.

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The report also stated that the real estate sector may get another incentive. They may get an additional interest deduction of Rs 1.5 lakh on affordable home loans by another year until March 2023.

After the pandemic, real estate saw a rise in sales in 2021 as it went up to 90% of the pre-pandemic level.

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