Affordable housing: Low ceiling on value limits income tax benefits from home loans

V Swaminathan, CEO Andromeda, says, “The Rs 3.5 lakh deduction available for affordable housing made sense when the interest rates on such loans were 8-9 percent.”

“It helps to bear in mind that the actual loan amount is likely to be lower than Rs 45 lakh, if the registered value of the house is capped at Rs 45 lakh to avail this benefit. Also, the interest amount is likely to decrease over time, given the principal repayments are part of EMIs. To correct this, the government should revise the registered value to Rs 60 lakh so that buyers can avail the full benefit of these provisions,” says Swaminathan.