A realtors’ association has suggested that the tax exemption on interest for self-occupied property loans be increased to ?5 lakh in the upcoming budget from the current ?2 lakh to boost housing demand amid rising property prices and mortgage rates.

Builders have also requested tax incentives to support both the demand and supply of affordable homes.

Under current provisions, the deduction allowed on interest for loans on self-occupied property is limited to ?2 lakh. The association noted that the annual value of properties held as stock-in-trade and not rented 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.

Additionally, longstanding sector demands — such as granting industry or infrastructure status and increasing tax exemption limits on home loan repayments — should be considered to support sustained long-term growth in the housing sector.

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