Decrement of tax in house loans
The maiden Budget, presented by Arun Jaitley, the finance minister motivates people to buy a house. A first time home buyer who is thinking of buying a house for a long time, but always delayed the plan only to avoid the burden of high inflation or a service loan which has an ever increasing interest rate, can undoubtedly invest now with the decrement of interest in home loan.
Increasing savings and along with that an increased amount of tax benefits can help in motivating people to buy a house. Neeraj Bansal, partner and head of real estate and construction, of KPMG in India says that available cheaper loans along with the increment in income tax deduction on housing loan interest, which has gone down by Rs 50,000 should definitely increase the demand and help in the sale of housing units in India. The housing sector should definitely experience a moderate rise in the quarterly absorption rate of around 40,000-50,000 units in a short term.
But, certain factors like high inventory of unsold flats, hiked property prices and high interest rates would keep a check on the sales. The slight increase in disposable income in people as basic exemption limits and deduction, which comes under the Section 80C, would definitely smooth the flow of funds into the housing sector from individual savings.
Source: Hindustan Times
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