Budget 2024: Key Expectations for Homebuyers in India

Finance Minister Nirmala Sitharaman will introduce the Interim Budget 2024-25 on February 1 and salaried taxpayers have high expectations on the real estate front. One of the foremost expectations from Budget 2024 revolves around the revision of the maximum deduction for home loan interest under Section 24 of the Income Tax.  Salaried individuals who are home loan borrowers are reluctant to move from the old to the new tax regime to not lose the home loan interest deduction allowed under the old regime. They are expecting some measures to be taken in this regard to encourage people to shift to the new tax regime act. 

Higher deduction for home loan interest: Currently, there's a deduction limit of ₹2 lakh on interest paid for a self-occupied property under Section 24 of the Income Tax Act. Homebuyers expect this limit to be increased to at least ₹3 lakh or even ₹5 lakh, making homeownership more affordable.

Increased deduction for principal repayment: The deduction for principal repayment of a home loan is currently ₹1.5 lakh under Section 80C. Experts suggest creating a separate deduction for this, potentially providing further tax relief.

Extending Credit Linked Subsidy Scheme (CLSS): The CLSS scheme provides interest subsidies on home loans for first-time homebuyers in the middle-income group. Extending this scheme and increasing the income eligibility could give a push to affordable housing demand.

Relaxation of stamp duty and registration charges: Stamp duty and registration charges can add significantly to the cost of buying a property. Reducing these charges would make homes more affordable.

These changes could spark a revival, particularly in the budget housing segment. Though this is an Interim Budget, traditionally viewed as a stop-gap arrangement before a full-fledged Budget post-general elections, it still holds significant potential for addressing immediate concerns and laying groundwork for future policies.