PHDCCI urges Govt to hike the tax deduction of interest on home loans

Article from ET Realty

NEW DELHI: Industry body PHD Chamber of Commerce and Industry (PHDCCI) has urged the government to increase the deduction of interest on home loans to Rs 5 lakh from the current Rs 2 lakh to give a boost to the housing and construction sectors.

“The move will reduce EMIs and help spur disposable incomes, which further will boost investment in the real estate sector,” said Mahesh Gupta, president, PHDCCI.

The government in its Budget for 2015 had increased the benefit on deduction of interest on home loan to Rs 2 lakh from Rs 1.5 lakh in the case of a self occupied house.

The body also suggested that the government find ways through which more and more people can buy homes.

The housing sector is reeling under the impact of huge piled up inventory due to sluggish sales. This slowdown in real estate has also impacted the construction sector.

“We are today seeing steel prices plummeting and this fall is because of a big decline in demand,” said Gupta. Other sectors like cement, too, are facing the heat from the demand slowdown, he pointed out.

Gupta also urged political parties to unite for passing the GST bill soon. “We believe the GST will be implemented soon to create a common market within India to reduce the transaction costs,” he said, adding, “Implementation of GST will enhance India’s GDP by 2 percentage points.”

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