NAREDCO suggests higher limit for interest deduction on home loans

In a bid to boost demand in the real eState sector and the National Real EState Development Council (NAREDCO) has recommended the Union Ministry of Finance a slew of measures including setting a higher limit for interest deduction on home loans and reinStatement of the Income Tax Settlement Commission.

The recommendations come at a time when the apex realty organisation under the aegis of Union Ministry of Housing and Urban Affairs announced its Urban and Real EState Development Conclave, a premier national level conclave for the real eState sector.

“It is suggested that the deduction on account of interest payment available under Section 22 of I T Act 2025 should be made applicable from the year in which capital was borrowed as for principal u/s 80C and should be to the extent of full interest paid, at least in respect of one house,” NAREDCO said in its recommendations to the Union Ministry of Finance.

It further said, “At least the limit of Rs 2 lakh should be raised to Rs 5 lakh or more for owner occupied houses. Also, five years period for acquisition / completion from the year of borrowing should be dispensed with.” “The real eState sector plays a critical role in India’s economic growth, employment generation and urban transformation.

Rationalising taxation, especially on housing finance, will directly stimulate end-user demand, provide much-needed impetus to a sector grappling with a significant housing shortage, and offer relief to homebuyers impacted by project delays arising from cash flow constraints, while restoring overall buyer confidence,” said Parveen Jain, President, NAREDCO. NAREDCO has also suggested the reinStatement of the Income-tax Settlement Commission.

“Restoring and strengthening dispute resolution mechanisms like the Income-tax Settlement Commission is critical for fostering a transparent, investor-friendly environment in the real eState sector. Coupled with rationalized taxation policies, these reforms will catalyzesustainable growth, boost housing affordability, and accelerate India’s journey towards becoming a truly developed economy by 2047.” said Dr Niranjan Hiranandani, Chairman, NAREDCO.