We are happy with the governments focus on affordable housing. Loan amount that qualifies under priority sector lending. Now, a home loan of Rs. 25 lakh would qualify as priority sector lending. The previous limit was Rs. 20 lakh. The FM has also extended the 1% interest subsidy scheme for home loans up to Rs. 15 lakh up from Rs 10 lakhs for another year. This is a good way to encourage entry level and affordable homes, which typically go upto Rs. 25 lakhs on a pan- India basis.
Mortgage Risk Guarantee Fund for Rural Housing – will help introduce rural population to invest in entry level housing with mortgage support, as against public funded projects.
The FM has also announced an investment linked deduction for affordable housing through a notified scheme – We will eagerly await the details of the specific notified scheme, but once again believe that affordable housing is the need of the hour. In fact, we believe, affordable housing should be treated on par with infrastructure and once again the FM should provide for benefits not on the basis of the size of the housing units, but on value of max of Rs 25 lakhs, in line with the priority sector lending norms already announced in this budget.
We would have liked the government to have enhanced the personal tax deductions for housing loans – both interest and principal amounts to enhance the benefits to individuals towards housing investment, especially towards first homes.
