First home buyers got a shot in the arm after Finance Minister P Chidambaram announced additional deduction on payment of interest for homes below Rs. 25 lakh.

First housing loan of up to Rs. 25 lakh will be eligible for extra Rs. 1 lakh tax deduction, Mr Chidambaram said. Currently, the deduction limit for payment of interest for self-occupied property is Rs. 1.5 lakh.

The deduction will be applicable for loans taken in fiscal 2013-14.
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  • more info
    Finance Minister P Chidambaram today raised tax deduction limit by Rs 1 lakh for the first time home buyers to promote the housing sector.
    "...a person taking a loan for his first home from a bank or a housing finance corporation up to Rs 25 lakh during the period April 1, 2013 to March 31, 2014 will be entitled to an additional deduction of interest of up to Rs 1 lakh," he announced while presenting Budget 2013-14 in Parliament.

    "If the limit is not exhausted, the balance may be claimed in 2015-16. This deduction will be over and above the deduction of Rs 1.5 lakh allowed for self-occupied properties under section 24 of the Income-tax Act," he said.

    The move is likely to promote home ownership and give a fillip to a number of industries including steel, cement, brick, wood, and glass besides providing jobs to thousands of construction workers.




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  • What about loans above 25 Lakhs? Will this additional 1 Lakh rebate hold good..
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  • only for new investor and buyers
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  • HOLD ON.......

    There is one more catch point ..i.e. purchase price

    On the house property front there is an attempt to encourage first time investors through a higher deduction that will be available for repayment of interest on housing loans. For a first time buyer if the value of the property is Rs 40 lakh or less and if the housing loan is Rs 25 lakh or lower then an additional deduction of Rs 1 lakh would be available over and above the existing Rs 1.5 lakh deduction.
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  • Originally Posted by 4cubeww
    more info






    This is a Joke from Finance minister...
    Maximum advantage that one can get is just 30-32K for fist time home purchase...i.e. Whole loan tenure (not each year) allows only one lakh additional exemption. :bab (59):
    Same As Expected from FM. lol
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  • 25 lakhs is loan amount or the property value restricted to that!
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  • Originally Posted by smk123
    25 lakhs is loan amount or the property value restricted to that!


    Follow
    http://www.indianrealestateforum.com/746766-post2.html

    OR

    https://groups.google.com/forum/?fromgroups=#!topic/mjazaliya/oTY5EfLaWY0
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  • Originally Posted by abhiseth
    What about loans above 25 Lakhs? Will this additional 1 Lakh rebate hold good..


    No

    Originally Posted by amit4india
    only for new investor and buyers


    True

    Originally Posted by sumitrananda
    This is a Joke from Finance minister...
    Maximum advantage that one can get is just 30-32K for fist time home purchase...i.e. Whole loan tenure (not each year) allows only one lakh additional exemption. :bab (59):
    Same As Expected from FM. lol


    This deduction is only available for 1 yr. Leftover balance, if any, can be claimed in the next.

    Originally Posted by smk123
    25 lakhs is loan amount or the property value restricted to that!


    25 lakhs is max loan amount permissible for this deduction with a caveat that the property value should not exceed 40 lakhs
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  • This is total crap praposal

    it is on top of section 24 that allows 1.5 lac rebate on interest. And applicable only for self occupied house. Therefore this 1 lac extra rebate also on self occupied and i think will not applicable for under construction project. So, it is beneficial for someone who got hist stars aligned too well
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  • Can also anyone advise on the interest outgo for a 25 lakh loan in the first year.
    I have my doubts that it may not be 1.5l(existing) + 1 lak(new)
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  • Originally Posted by amitvohra76
    Can also anyone advise on the interest outgo for a 25 lakh loan in the first year.
    I have my doubts that it may not be 1.5l(existing) + 1 lak(new)


    for 25 lakh loan, at 10.25 %, interest outgo would be close to 21K per month.

    There is a provision to carry forward the unused balance of 1 Lakh to the next assessment year.

    EDIT: The aforementioned numbers are for a tenure of 20 years
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  • It can be between 1.5 to 2.5 lakh depend on the tenure, interest rate etc.......
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