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TMI BlogPromoting Affordable Housing through deduction in respect of interest on loans : Clause 130 of the Income Tax bill, 2025 Vs. Section 80EE of the income Tax Act, 1961X X X X Extracts X X X X X X X X Extracts X X X X ..... rties. The significance of this provision lies in its potential to encourage home ownership by offering financial incentives through tax deductions. It aligns with the government's policy objectives of promoting affordable housing and supporting the real estate sector. The provision is designed to ease the financial burden of interest payments on home loans, thereby making home ownership more accessible to individuals. Objective and Purpose The primary objective of Clause 130 is to provide a tax deduction on interest paid on loans taken for acquiring residential house property. The legislative intent behind this provision is to incentivize individuals to invest in residential properties by reducing the effective cost of borrowing. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween April 1, 2016, and March 31, 2017. - The loan amount sanctioned should not exceed thirty-five lakh rupees. - The value of the residential house property should not exceed fifty lakh rupees. - The assessee must not own any residential house property on the date of sanction of the loan. These conditions ensure that the benefit is primarily targeted at first-time homebuyers and those purchasing affordable housing. The specific timelines and monetary limits reflect a targeted approach to stimulate housing in a particular economic context. 4. Exclusivity of Deduction: The clause specifies that if a deduction is claimed under this section, it cannot be claimed under any other provision of the Income Tax Act for the same or any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Act. 5. Historical Context and Evolution: Section 80EE was introduced as part of the Finance Act, 2013, and has undergone amendments to align with changing economic contexts. Clause 130 continues this legislative trend, reflecting evolving policy priorities and economic conditions. Practical Implications The practical implications of Clause 130 are significant for various stakeholders: - Individuals: For individual taxpayers, this provision offers a direct financial benefit by reducing taxable income through interest deductions. It lowers the overall cost of borrowing, making home ownership more financially viable. - Real Estate Sector: By promoting home ownership, the provision indirectly supports the real estate sector, le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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