New Delhi
The time for presentation of Budget 2025 is gradually approaching. Meanwhile, speculations regarding many things have also increased. From this budget, common people and investors have great expectations. It is being said that the government can also announce something regarding tax exemption. Meanwhile, experts are considering including home loan in the new tax regime. In such a situation, it can be announced in the budget also. Under the old tax system, taxpayers get the benefit of home loan deduction. Those who select the old tax regime can claim a deduction of up to Rs 2 lakh for home loan interest on occupied property, which is not available in the new tax regime.
There are some concessions for properties given on rent under the new system. For example, there is no limit on deduction of home loan interest from taxable rental income as per Section 24 of the Income Tax Act. However, the interest on the loan often exceeds the rental income, causing losses to the property owner. Unfortunately, this loss cannot be offset by income from other sources or carried forward into the new tax regime.
ICAI has presented three recommendations regarding tax on income from house property under the new tax regime. ICAI has requested the government to allow deduction on interest up to Rs 2 lakh under the new tax regime. ICAI has also suggested that loss from house property should be allowed to be set off against income under other heads. In cases where there is no income under any other head, ICAI proposes that the loss should be eligible to be set off against income from house property for the subsequent 8 assessment years. Both home loan borrowers and industry experts are hopeful that Finance Minister Nirmala Sitharaman will heed their long-standing demands for better tax benefits.
Home loan under old tax system
Despite no new or improved tax exemption being implemented in the old tax regime since the implementation of the new system, experts are advocating an increase in the exemptions. This is in response to the rising cost of home ownership in urban India. Experts believe that the current tax deductions provided under sections 80C and 24B in the old tax regime are inadequate and are calling for reforms to make home ownership more affordable.
