Better home loans and tax cuts, ask realtors

CHENNAI: Chennai realtors are expecting the Union government to enhance the income tax exemption for up to Rs 3 lakh paid as interest on housing loans in a year from the existing Rs 1.5 lakh, to boost the real estate market. “The market, which was struggling last financial year, has picked up and we expect the government to enhance the income tax exemption limit,” says Siva Krishnan, head of residential services (Chennai), Jones Lang LaSalle India.The Confederation of Real Estate Developers' Associations of India feels that reforms need to be ushered in the realty sector and housing policy should be amended in order to address a huge demand of 26 million homes.“Inordinate delay in the sanction of approvals have hit hard. Provision of single-window clearance for real estate development projects is the need of the hour,” said CREDAI president T Chitty Babu. “Some of the measures like creation of Special Residential Zones can help. Affordable housing sector should continue to grow based on the incentive given for borrowings from banks for homes," he added. “The present limit for deduction under section 80C is Rs 1 lakh. In addition to the present deduction of upto `one lakh, a separate limit of up to Rs three lakh deduction be permitted for repayment of principal portion of housing loan for self occupied residential property,” he added.  He also said that the present limit for deduction of interest against “rental income” under section 24(b) is Rs 1.5 lakh for self occupied property and should be enhanced to Rs 3 lakh. Currently, a 36-month holding period is a must for qualification, as a long-term capital asset. This should be reduced to 12 months.