The government on Tuesday proposed to retain the income-tax exemption for up to Rs 1.5 lakh paid as interest on housing loans in a year, a step that brings cheers back to home loan borrowers.
The revised discussion paper on Direct Taxes Code (DTC), which would replace the decades old Income-Tax Act, has retained the tax exemption for up to Rs 1.5 lakh paid as interest on housing loans. The revised draft is put up for public comments till June 30.
Earlier in the first draft of DTC, the government was silent on incentive given to interest paid on home loans, leading to widespread fears that this sop would be withdrawn.
The revised draft, however, is silent on exemption given on principal amount paid on housing loans. The first was also silent on this front.
At present, borrowers can enjoy exemption on payment of of principal amou-nt. However, it is part of exemption to savings capp-ed at Rs 1 lakh per annum. The first draft had proposed to revise this limit to Rs 3 lakh a year. — PTI