The Finance Bill 2013-14 proposes additional tax benefit to the first – home buyer who takes a loan for an amount not exceeding Rs.25 lakh. Presenting the Union Budget in the Lok Sabha today, the Finance Minister Shri P.Chidambaram proposed that a person taking a loan for his first home from a bank or a housing finance corporation upto Rs.25 lakh during the period 1.4.2013 to 31.3.2014 will be entitled to an additional deduction of interest of Rs.1 lakh.

The Finance Minister hoped that this will promote home-ownership and give a filip to a number of industries like steel, cement, brick, wood, glass etc besides jobs to thousands of construction workers.

This deduction will be over and above the deduction of Rs.1.50 lakh allowed for self-occupied properties under Section 24 of the Income Tax Act. If the limit is not exhausted, the balance may be claimed in AY 2015-16.

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DSM/RC/nb/08

(Release ID :92735)

Additional deduction of interest extends tax relief for first-home loans, subject to loan cap and eligibility period. An additional interest deduction is proposed for first home buyers obtaining qualifying loans from banks or housing finance institutions within a specified eligibility period, subject to a loan amount cap. This supplementary deduction is available in addition to the standard interest relief for self-occupied properties and any unused portion of the additional deduction may be carried forward and claimed in the subsequent assessment year.