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Budget sops for the housing industry -- a summary

The Union Budget has proposed that the interest on a loan for a self-occupied property be exempted from tax up to ceiling of Rs 75,000, up from the current ceiling of Rs 30,000. This move is expected to encourage middle-class investors to take loans to purchase dwelling units.

Housing projects have been granted a tax holiday under section 80 IA of the Income Tax Act.

Finance Minister Yashwant Sinha had emphasised that the housing finance companies must stay financially viable. Currently, the companies are subject to tax on interest on loans, on accrual basis. In order to lessen the burden, the Budget has proposed to amend the law so that the income of such companies will be taxable on actual basis.

Room for optimism as Budget sops stir housing sentiment

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