Income Tax exemption on home loans may be doubled

The government is considering a proposal to double the income tax exemption limit on housing loans to Rs 3 lakh from the current level of Rs 1.5 lakh, according to government sources. The proposal is being discussed by the committee of secretaries that was set up in the wake of the global financial crisis affecting the Indian economy. Industry lobby groups have been urging the government to raise the limit as it will reduce the cost of borrowing on home loans.

On December 7, the government had virtually unveiled a mini-budget that included Rs 20,000 of additional spending on infrastructure and cut excise duty across-the board. It also provided a package for banks aimed at making home loans cheaper.