Naredco suggests raising tax relief on home loan interest to Rs 5 lakh

Realtors' body NAREDCO on Tuesday suggested that the tax exemption on interest on self-occupied property loans should be increased to Rs 5 lakh in the upcoming budget from Rs 2 lakh currently to boost housing demand amid a rise in housing prices and mortgage rates.

Builders also sought some tax incentives to boost demand and supply of affordable homes.

NAREDCO noted that under Section 24 of the Income Tax Act, the deduction allowed on interest on loans for self-occupied property is limited to Rs 2 lakh.

"Given the rising property prices and interest rates, NAREDCO proposes increasing this limit to at least Rs 5 lakh," the association said in a statement.

The realtors' body mentioned that currently the annual value of property held as stock-in-trade and not let out is considered nil for up to two years from the end of the financial year in which the construction completion certificate is obtained. After this period, the notional income is taxed.

It suggested that this provision sho