New Delhi: Union Finance Minister Nirmala Sitharaman may not have given any relief to middle-income tax payers in her budget proposals, but one can still benefit from other tax incentives.
As per the budget proposal, income tax payers will get a tax deduction of Rs 1.5 lakh on affordable home loans of up to Rs 45 lakh. This is applicable on loans borrowed up to March 31, 2020.
With this announcement, income tax payers will get tax rebates of around Rs 3.5 lakh on loans of up to Rs 45 lakh because interest paid on housing loans is allowed a deduction of up to Rs 2 lakh in case of self-occupied property.
“Therefore, a person purchasing an affordable house will now get an enhanced interest deduction of up to Rs 3.5 lakh. This will translate into a benefit of around Rs 7 lakh to middle-class home-buyers over their loan period of 15 years,” the Finance Minister said in her budget speech.
Purchase of electric vehicle:
On purchase of an electric vehicle, the budget has proposed an income tax deduction of Rs 1.5 lakh on interest paid on loans taken to purchase the vehicle.
The aim is to encourage increased usage of electric vehicle and gradual withdrawal of conventional vehicles from the roads.