Interest deduction on home loans raised by Rs 1.5 lakh to Rs 3.5 lakh for affordable housing

Agencies
July 6, 2019

New Delhi, Jul 6: Finance Minister Nirmala Sitharaman Friday raised tax deduction limit to Rs 3.5 lakh on interest paid on housing loan sanctioned during this fiscal for purchase of first home worth up to Rs 45 lakh, a move aimed at boosting the affordable housing segment.

Besides, the government will initiate reform measures to promote rental accommodations and will finalise and circulate a model tenancy law to states, the minister said.

In her maiden Budget, Sitharaman announced that 1.95 crore homes will be provided to eligible beneficiaries till 2021-22 under the Pradhan Mantri Awas Yojana - Gramin (PMAY-G). The regulation of housing finance companies will now be done by the Reserve Bank of India instead of the National Housing Bank, she added.

To align definition of affordable housing under the Income Tax Act with GST Acts, Sitharaman proposed to increase the limit of carpet area from 30 square metre to 60 square metre in metropolitan regions and from 60 square metre to 90 square metre in non-metropolitan areas. The cost of the affordable house has been fixed at Rs 45 lakh and below.

The finance minister said the interest paid on housing loans is currently allowed as a deduction to the extent of Rs 2 lakh.

"In order to provide a further impetus, I propose to allow an additional deduction of up to Rs 1.5 lakh for interest paid on loans borrowed up to March 31, 2020 for purchase of an affordable house valued up to Rs 45 lakh," she added.

The minister elaborated that a person purchasing an affordable house will now get an enhanced interest deduction of up to Rs 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."

As per the budget document, this interest deduction will be subject to condition that the loan has to be sanctioned during the current fiscal only. The home buyer should not have any other residential property in his name on the date of sanction of loan.

To achieve the goal of 'Housing for All' and affordable housing, Sitharaman said a tax holiday has already been provided on the profits earned by developers of affordable housing.

Sitharaman proposed that several reform measures would be taken to promote rental housing.

"Current rental laws are archaic as they do not address the relationship between the lessor and the lessee realistically and fairly. A Model Tenancy Law will also be finalised and circulated to the states," she added.

On land parcels held by the public sector units, the finance minister said that large public infrastructure as well as affordable housing projects could be developed.

Sitharaman said the Pradhan Mantri Awas Yojana Gramin (PMAY-G) aims to achieve the objective of 'Housing for All' by 2022 and a total of 1.54 crore rural homes have been completed in the last five years.

"In the second phase of PMAY-G, during 2019-20 to 2021-22, 1.95 crore houses are proposed to be provided to the eligible beneficiaries," she added.

These houses are being provided with amenities like toilets, electricity and LPG connections. With the use of technology, the DBT platform and technology inputs, average number of days for completion of houses has come down from 314 days in 2015-16 to 114 days in 2017-18.

Stating that efficient and conducive regulation of the housing sector is extremely important, the National Housing Bank (NHB), besides being the refinancer and lender, is also the regulator of the housing finance sector.

"This gives a somewhat conflicting and difficult mandate to NHB. I am proposing to return the regulation authority over the housing finance sector from NHB to RBI. Necessary proposals have been placed in the Finance Bill," she added.

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News Network
January 17,2020

Bengaluru, Jan 17: Chief minister BS Yediyurappa is likely to induct new ministers into his cabinet only after he returns from Davos, Switzerland, on January 25.

Yediyurappa will leave for Davos on January 19 to participate in the World Economic Forum’s 50th annual meet.

Sources say Yediyurappa is keen on expanding his cabinet before he leaves for Davos and is still trying to secure the green signal from BJP national president Amit Shah. However, Shah has cold-shouldered Yediyurappa’s several requests for a meeting to discuss the issue.

Shah is scheduled to visit Karnataka on January 18 to participate in a pro-Citizenship (Amendment) Act rally in Hubballi and the CM plans to corner him there. But, given the time constraint, Yediyurappa is likely to put off the exercise till he returns from Davos even if Shah extends approval.

“Even if Shah gives the green signal, Yediyurappa will have less than 24 hours to expand his cabinet,” a source said. “It is highly unlikely he will rush through the process of inducting ministers. Also, his presence is required to douse disgruntlement which is bound to arise once the new ministers are sworn in.”

The CM and the party high command are on different pages as far as cabinet expansion is concerned. While Yediyurappa is hell-bent on keeping his promise of inducting all the newly elected MLAs, who switched from Congress and JD(S) to the BJP, Shah is keen on sharing vacant berths equally between loyal MLAs and the new entrants. There are 16 cabinet berths vacant.

Shah, sources said, is of the opinion that giving 12 berths to the turncoats will lead to heartburn among loyalists and it will impact the party’s prospects in the next election. “Moreover, he is of the opinion that none of the turncoats have mass appeal, nor do they have any administrative experience. This, he thinks, will impact governance,” said a source.

This has resulted in a deadlock and the issue has dragged on for a month now.

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News Network
March 24,2020

Bengaluru, Mar 24: Eight new positive coronavirus cases were confirmed in Karnataka on Tuesday, taking the tally to 41 in the state, the health department said.

"Till date 41 COVID-19 positive cases have been confirmed in the state which includes one death and 3 discharged," the department said.

According the department bulletin, 37 positive patients are in isolation at designated hospitals and their condition is stable.

Of the 41 confirmed cases, six are transit passengers hailing from Kerala who have landed in airports and being treated in Karnataka.

Among the eight passengers confirmed on Tuesday also three men and a woman are from Kasaragod in Kerala with a history of travel to Dubai and Saudi Arabia respectively.

All the four had landed in Mangaluru, where they are being treated.

The others are: two men, aged 40 and 65, from Uttara Kannada district in Karnataka with travel history to Dubai;

a 56-year-old woman, a resident of Chikkaballapura district, who is a family member and co-passenger of person who tested postive with travel history to Mecca, and a 56-year-old woman, resident of Bengaluru, a contact of another person who has tested positive for the virus,

Among the 41 cases, 24 has been reported from Bengaluru, five from Dakshina Kannada, three each from Kalaburgai and Chikkaballapura, two each from Mysuru and Uttara Kannada, and one each from Kodagu and Dharwad.

All the three discharged patients are from Bengaluru, while one death was reported in Kalaburagi earlier this month, which was the country's first COVID-19 related death.

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News Network
June 13,2020

Mangaluru, Jun 13: A bus agent died after the compound wall of his house collapsed on him at Matadagudde, near Gurupura-Kaikamba, on Friday afternoon. This is the first rain-related death reported in Dakshina Kannada.

The victim is Narayana Naika, 52. According to police, heavy rain on Friday afternoon blocked a small water stream adjacent to his compound wall, and the deceased was clearing it. The stone compound wall then suddenly collapsed on him, and he got buried underneath. He sustained grievous head injuries and died on the way to hospital.

Narayana is survived by his wife and two children.

Dakshina Kannada received an average rainfall of 26.1mm in the last 24 hours till 8.30 am on Friday. The highest rainfall was recorded at Puttur and Mangaluru taluks at 31.3mm and 30.3mm, respectively. Bantwal and Sullia taluks received 26.3mm and 24.6mm of rain, respectively.

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