How stamp duty reduction will benefit homebuyers in 2022
By magnoliaAdmin | Feb 11, 2022
The Central Government is marking all our efforts to get ready for “Housing for All” in 2022. However, this still seems to be a distant dream as the COVID-19 situation has for the last 2 years not only hit almost all the sectors- including real estate but has also added to the misery of the homebuyers. Low interest on home loans, stamp duty reduction and extension of tax benefits on affordable housing, as announced in the previous budget, helped the sector reach almost 90 par cents of pre- COVID members.
Moreover, Nirmala Sitharaman announced the union budget. Now here are some of their major expectations that would help retain the momentum in the real estate sector, and boost their sales. The state government has extended the 2% relief on stamp duty and 10% reduction in the property circle rate till 31 March 2022.
Therefore, homebuyers are looking toward the budget in 2022 with better hope. In this article, we are going to discuss how stamp duty reduction will benefit homebuyers in 2022.
Improve the limit of home loan interest deduction:
As per section 24 of the income tax act 1961, a buyer can claim a deduction up to a maximum of Rs.2 Lakh for interest on the loan taken for the construction of self-occupied house property. Chintal Patel Partner and Head Real Estate, Building and Construction, KPMG in India say, “Given the rising interest and property rates, an increase in the said exemption to at least Rs.5 lakhs per annum in the upcoming budget can provide the boost can provide the necessary boost to residential segment and premium markets such as MMR ETC”.
Deduction of principal repayment on home for separate provision:
A separate deduction of Rs.1.5 to Rs.2.0 lakh for principal repayment (other than section 80c) could help provide an additional fillip to residential sales across India and also help homebuyers reduce their tax burden.
Atul Monga (Co-Founder, Basic Home Loan) says, “With high construction costs and property prices, the budget 2022 can be a way for the government to make it more cost-effective for homebuyers. The maximum limit of principal repayment for tax rebates should be increased from the current Rs.2 lakh to a higher limit or should be categorized as a separate provision in tax rebate. This will help reduce the financial burden of buyers and generate healthy housing demand, especially in the affordable housing segment”.
Stamp Duty Reduction:
To make the real estate market more affordable, the government has been trying to reduce stamp duty by announcing a few schemes. Monga said, “In Maharashtra, for instance, it was announced that from 1st April 2019, on words there would be a reduction of 2 per cent in stamp duty. This is a welcome move as it will help bring down the price of homes and make them more affordable”.
Input tax credit on the existing GST:
The construction cost increasing across major housing marketing in India, provisioning of the input tax credit on the existing GST rates for under-construction properties shall provide some respite to the developers and end-users.
-By Moon Sarkar