SBI Seek Higher Tax Benefits for Home Loan

The country’s largest lender, SBI (State bank of India) in wish list for the union budgets requests government concerning the rise in the upper limit for interest subsidy (subvention) of home loans from Rs 15 lakh to 25 lakh and the expansion of cost of house for the eligibility of subvention from Rs 25 lakh to Rs 35 lakh.    

Arun Jaitley, the Finance Minister is slated to present the union budget on February 28.

In December 2014, the SBI’s home loan book remained at Rs 1,52,905 crore, representing a 13.1 percent growth over Rs 1,35,129 crore at the end of December 2013. 74 percent of its loans are in the below Rs 30 lakh category.

Over the past five years, its housing credit portfolio has extended at a compounded annual growth rate of 15.8 percent. For repayment of home loans, SBI planned separate tax benefit scheme and for recuperation of principal component of home loans, it requested the government to offer more than Rs 50,000 additional deductions and above the existing limit of Rs 1.5 lakh.

From the date of commencement of the payment of principal or interest, the deduction of interest paid on home loan should be entertained, SBI added.

In addition, while computing income tax, the amount paid during the home buying for the registration and stamp duty should be allowed for statutory deduction.

Besides, SBI noted that to persuade the bank push for home loan in rural areas, the credit guarantee scheme for housing finance wants to be extended to cover affordable housing in rural areas. Seriously, the government should consider bringing home loan benefit for first time home buyers under the overall priority sector ambit. The single window clearance system should be implemented for all statutory and administrative approvals for affordable housing projects, in order to meet the target of Housing for all by 2022.