Request to FM to allow tax rebate on house loan interest where delivery is delayed
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The current provisions of Income tax act allows that under Section 24 of the Income Tax Act, an individual can claim tax deduction of the interest payment on the housing loan up to a maximum amount of Rs.2,00,000.
Section 24 very specifically states that Tax Deduction for payment of Interest shall not be allowed before the construction is complete.
Moreover, if the property is not acquired/constructed completed within 5 years from the end of financial year in which the loan was taken, the interest benefit in this case would be reduced from 2 Lakhs to Rs 30 thousand only. (Limit increased from 3 years to 5 years from FY 2016-17 onwards).
Purchasing a house is very very costly and home buyer not only puts all his savings but also commits entire future savings in form of EMI. Due to huge costs, while doing financial planning the home buyer also takes into account the income tax benefits while committing EMIs. Now due to no fault of home buyers, the houses are not being delivered in time. In many cases, the buyers are still waiting as Builders have fraudulently siphoned their money elsewhere and have filed for bankruptcy. While this is entirely due to the fault of government who had not timely put in place a regulatory structure for this sector, the home buyers are the sufferers and are honestly paying EMIs. They, on one hand, have been deprived of their legitimate homes, on the other, they are being denied income tax benefits; despite the fact that they are not at fault.
The Government should allow all tax benefits that are allowed under section 24, 80C and 80 EE to such home buyers who have taken home loan after 3rd year of taking such loan or possession of the property, whichever is earlier, irrespective of whether the construction is complete or not as this is neither in hands of home buyers nor is due to any of their faults.
I am a home buyer who has put in entire of my savings to buy a home from Jaypee in 2012. Six years down the line Jaypee has dishonestly filed bankruptcy. I am still waiting for my house and honestly paying EMIs without getting any tax benefit.
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