EU budget 2022: five things you need to know about mortgage incentives

NEW DELHI: The Union Budget 2022-23 announced by Finance Minister Nirmala Sitharaman has allocated Rs 48,000 crore to Pradhan Mantri Awas Yojana (PMAY). It also allowed for faster approvals for affordable housing in urban areas.
EU budget 2022: full coverage

She also announced the establishment of a high-level panel of experts to advise on policy issues, capacity building and implementation.
Hailing the decision to build 80 lakh ‘pucca’ houses for the poor under the PMAY, Prime Minister Modi said it was a way to lift people out of poverty.
“When you get a house, a poor person has courage… We didn’t know the power of people, there were a lot of people in this country who used the poor for political purposes,” he said. he declares.
Here are some things potential buyers should know home loan incentives:
1) Even a loan taken from an employer, friend or private lender is eligible for the deduction – but only on the interest and not on the principal. And you will need a certificate from the lender.

2) Booking an apartment under construction is sometimes cheaper. The IT law allows you to claim the total interest paid during the pre-delivery period as a deduction in five equal installments starting from the financial year in which the construction was completed or you acquired your apartment (this means usually the date of taking possession). Of course, the maximum you can claim as a deduction per annum continues to be Rs 2 lakh, in the case of independent ownership (although you may be eligible for the additional interest deduction of Rs 1.5 lakh for your first House)

3) It makes sense to buy the new apartment jointly – say with your spouse, then each of you is entitled to a deduction of Rs 2 lakh for interest funded by each of you as explained above. If you have a working son/daughter and the bank is willing to split the loan in three ways, all three can qualify for a deduction of up to Rs 2 lakh each on independent property. Add in the additional interest (if applicable for leased or deemed leased assets) and the savings can be significant.

4) No imputed rent will be added to the taxable income of your second independent residential property. So if you can’t find a ready tenant, you can keep it independent. Note that this leeway is only available for a maximum of two houses. A third house that is not rented will still be taxed on its “assessed value”. In other words, the tax will be calculated at the expected market rent.

5) Total loss of house ownership which can be adjusted with any other income (salary, other source) has been capped at Rs 2 lakh. Also, if you are unable to offset the interest of Rs 2 lakh against any of the heads of income, the (excess) interest that could not be offset can only be carried forward for eight tax years . Moreover, such compensation is only possible on ‘Real estate property income’. It becomes a sunk cost if you haven’t rented out your home.
(With contributions from EY)