Tax benefit on home loan extended till March 2021

New Delhi: Aiming to boost the affordable housing demand, Finance Minister Nirmala Sitharaman on Saturday proposed to extend the date of availing an additional Rs 1.5 lakh tax deduction on home loan interest by one more year till March 2021.

The additional deduction of Rs 1.5 lakh over and above Rs 2 lakh was introduced in the last year's budget. This was allowed for those buying homes for the first time and of up to Rs 45 lakh and made applicable for home loans sanctioned till March this year.

The finance minister also announced that builders will get tax holiday on affordable housing projects approved till March 2021.

"For realisation of the goal of 'Housing for All' and affordable housing, in the last budget I had announced an additional deduction of up to Rs 1.5 lakh for interest paid on loans taken for purchase of an affordable house. The deduction was allowed on housing loans sanctioned on or before March 31, 2020.

"In order to ensure that more persons avail this benefit and to further incentivise the affordable housing, I propose to extend the date of loan sanction for availing this additional deduction by one more year," the minister said.

The additional deduction of Rs 1.5 lakh, over and above the existing Rs 2 lakh, is being provided under the Section 80EEA.