Budget 2024: Govt Needs To Introduce A Separate Section For Repayment Of Home Loans, Here’s Why

Basis for recommendationSection 80 C was introduced in 2003 with an initial limit of Rs. 1 lakhs and increased to Rs 1.50 lakhs in 2014. If we want to make it commensurate with the average rate of inflation of 6% for 21 years,  the amount of deduction available today should at least not be less than 3.40 Lakhs.While the government did not increase the limit commensurately on the one hand but on the other hand more and more eligible items were added over the years and thus overcrowding the sphere. Items like deposits in Senior Citizen Saving Schemes, National Pension System, Tax saving fixed deposits, Sukanya Samridhi Scheme etc. are few of the items which have been added over the years, expanding the scope of overall deduction available under Section 80 CCE covering Section 80 C, 80 CCC and 80 CCD(2).On realistic basis the amount of home loan required to be taken has multiplied many times over the years due to skyrocketing prices of real estate. In some of the cases mandatory items like school fee, contribution towards employee provident fund and premium for life insurance policy themselves exceed the limit of Rs. 1.50 lakhs and thus crowding out the amount of principal repayment of home loan for which the tax payer cannot claim any deduction.In view of the above facts, I request the finance minister to carve out the deduction for home loan repayment from Section 80 C and introduce a separate section to accommodate this item. This will also incentivise many fence sitters to contemplate buying a property with home loan and help revive the real estate sector and also help the government achieve the “Housing  for all by 2022” dream.

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