Budget 2024 FM Scheme for middle-class housing.

FM presented a new scheme in Budget 2024 for middle-class housing.: A new scheme has been introduced by Finance Minister Nirmala Sitharaman in her address announcing the interim budget 2024 fm scheme middle-class housing. According to the budget address, “Our Government will launch a scheme to help deserving sections of the middle class “living in rented homes, or slums, or chawls and unauthorized colonies” to buy or build their own houses.”

FM presented a new scheme in Budget 2024

“Finance Minister underlined government’s recognition of homeownership’s significance,” says Pradeep Aggarwal, Founder & Chairman of Signature Global (India) Ltd. A noteworthy announcement was made by the FM that a housing program aimed at the middle class will be announced shortly. This program would also cover individuals living in rental properties and would help them build or buy a home of their own. The Mid housing and Affordable housing sectors are predicted to thrive as a result of this strategy.”

There have been previous instances where the government has supported affordable housing. In order to lessen the income tax burden on buyers of affordable housing, the government has introduced a number of programs and exemptions under the Income-tax Act of 1961.

 First-time homeowner deduction under Section 80EE

The then-finance minister announced the creation of Section 80EE, a new section of the Income-tax Act, in Budget 2016. Subject to specific requirements, this provided an extra deduction on the interest paid on a house loan. A person may deduct up to Rs 50,000 from their interest payments under Section 80EE in addition to the deduction allowed under Section 24 if they meet the following criteria: 

a) The cost of the property cannot exceed Rs 50 lakh

b) The amount of the home loan cannot exceed Rs 35 lakh

c) The loan must have been obtained from a financial institution and approved between April 1, 2016, and March 31, 2017.

d) At the time the loan is approved, the taxpayer shouldn’t have any other residential property. Only first-time homeowners are eligible for this deduction. Section 80EE was provided in addition to the Section 24 deduction of Rs 2 lakh for interest paid on a home loan. When combined, these two clauses provide an individual taxpayer with a deduction of Rs 2.5 lakh.

Deduction for affordable housing under Section 80EEA

Budget 2019 established a deduction for affordable housing under Section 80EEA. Under certain restrictions, it permits an extra deduction of Rs 1.5 lakh from the interest paid on a house loan. In addition to the Rs 2 lakh deduction allowed by Section 24, there is also a deduction available under Section 80EEA. As a result, a qualified taxpayer was able to deduct Rs 3.5 lakh from the interest paid on a home loan. One needed to meet the following requirements in order to be eligible for a Section 80EEA deduction:

a) The property’s stamp duty value cannot exceed Rs 45 lakh. 

b) The taxpayer cannot own any residential property at the time the loan is sanctioned. 

c) A home loan can only be obtained between April 1, 2019, and March 31, 2022. 

d) It must come from a financial institution.

e) The borrower cannot be eligible for a deduction under Section 80EE. 

Housing for All under the Pradhan Mantri Awas Yojana (PMAY)

In addition to the above-mentioned tax deductions, the government introduced the PMAY program as part of the ‘Housing for All’ campaign. The scheme offered different kinds of purchasers a specific subsidy on home loan interest for up to Rs 2.67 lakh. The scheme was available to the following groups: Middle Income Group-I (MIG-I), Middle Income Group-II (MIG-II), and the Economically Weaker Section (EWS)/Low Income Group (LIG).

For loans up to Rs 6 lakh, Rs 9 lakh, and Rs 12 lakh, respectively, interest subsidies of 6.5%,4%, and 3% are permitted. For EWS/LIG, MIG I, and MIG II, the maximum carpet area per residence is 60, 160, and 200 square meters, respectively. Under the credit linked subsidy program (CLSS), the benefit for EWS/LIG recipients can reach up to Rs 6 lakh over a loan period of 20 years.