Impact of Budget on Home Loans

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Tax Savings on Home Loans

Finance minister in his budget speech for 2013-14 has announced that an additional benefit of Rupees one lakh will be provided on home loans up to Rupees Rs 25 lakhs for the first time property buyers.

This will be over and above the deduction of Rupees 1.5 lakh allowed for self occupied properties under section 24. Another condition is that the property should not cost more than Rupees 40 lakh.

This additional deduction can be climed over a maximum of two years ie 2013 -14 and 2014-15.

High End housing sector to cost More

Finance Minister had announced that TDS ( Tax deducted at Source) of 1% on the transfer of immovable properties which a market value of more than Rupees 50 lakh. The Buyer needs to have a TAN (Tax deduction Account Number) to deduct the tax on behalf of the central government. Only once the TAN is obtained, a person can purchase an immovable property. 99% of the amount will be paid to the seller and 1% to the government. TDS is set to effect the property transactions including properties which are up-market and luxury ones.

Last Updated on 03/07/2013