Hike Home Loan Interest Exemption to Rs 5 lakh: DLF

Real estate major DLF wants Finance Minister Arun Jaitley to more than double the home loan interest exemption limit to Rs 5 lakh.

"The Rs 1.5 lakh limit which was set way back in 1999 and was raised to Rs 2 lakh in the last Budget by the current Finance Minister, needs to be suitably enhanced to at least about Rs 5 lakh," Rajeev Talwar, group chief financial officer of DLF told NDTV.

In his first Budget, Mr Jaitley had raised the exemption limit on home loan interest for self-occupied property to Rs 2 lakh from Rs 1.5 lakh last year.

Higher deductions are needed because the definition of affordable housing has changed; a house typically costs up to Rs 50 lakh in metros now. On a Rs 40 lakh home loan, interest outgo per year can be as high as Rs 5 lakh at current interest rates, analysts say.

Capital Gains Exemption

DLF says the Mr Jaitley should scrap the time limit and the number of units limitation when it comes to selling an old house and acquiring new ones in return.

Under Section 54 of the Income Tax Act, when an individual sells an old house, he/she is allowed to buy only one house from the proceeds of the sale.

"We as an industry feel that when a person sells off a house he normally looks forward to providing at least one for himself and one for his children or maybe having two houses for two children, if he has two children," Mr Talwar said.

"So there should be no time limit which is usually three years for avoiding capital gains tax and there should be no numerical limit on how many houses you can buy when you get proceeds of the sale of a house."