Finance Minister Nirmala Sitharaman has extended the benefit of tax exemption on interest payments for one year by giving relief to affordable home buyers in Budget 2021. Relief has also been given for the help of migrant workers under the Rental Housing Project.
New Delhi. Finance Minister Nirmala Sitharaman has made several announcements in the budget this time to increase consumption amid the global epidemic. A special announcement has also been made for home buyers in the General Budget 2021. The tax exemption period on Affordable Homes has been extended for one more year. In the budget for July 2019, the central government announced an additional tax rebate of up to Rs 1.5 lakh for affordable home buyers. Now, the eligibility of this tax exemption has increased till 31 March 2022.
What does this relief mean for home buyers?
Houses worth less than Rs 45 lakhs are included under the Affordable Housing Scheme. In such a situation, if you are buying a house for Rs 45 lakh or less, then you will get the benefit of tax rebate of Rs 1.5 lakh on interest payment. You will get this exemption under section EEA of Income Tax Act. This scheme will be valid till 31 March next year. It is also worth noting that the house buyer should not have any other residential property till the date of issue of the loan.
This exemption is in addition to the tax exemption of Rs 2 lakh on the home loan interest rate under section 24 of the Income Tax Act. In this way, home buyers will get a rebate of Rs 3.5 lakh on home loan interest while buying a house worth less than Rs 45 lakh.
budget, and what was announced in the budget
to provide affordable houses for migrant workers, the Finance Minister has given tax under Affordable Rental Housing Project The tenure is extended for one more year. The Finance Minister said in the budget speech, ‘For this I notify the tax exemption of affordable rental housing projects.’
Developers who prepare affordable housing projects will also get the benefit of this tax exemption. The budget document said, ‘Under the existing arrangement of section 80-IBA of the Act, there is a provision that where the total income of the assessee is the profit or profit from a business, subject to certain conditions, they are entitled to 100 of the total profit or profit. A deduction of an amount equal to per cent is allowed. There is also a condition for this that permission for this project should be obtained from the competent authority after 1 June 2016. It should not be after 31 March 2021.
To help the migrant laborers and promote affordable rentals, the budget 2021 will get the benefit of tax exemption under section 80-IBA. It has also been notified in the official gadget of the Central Government. Experts say that this step of the government will give relief to all the stakeholders of this industry and the investment will also get boosted.