Home loans up to 10 Lakh to get govt. subsidy

By SiliconIndia   |   Thursday, July 30, 2009
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Bangalore: The government has announced that it will offer an interest subsidy of one percent for a year on home loans up to Rs. 10 lakh for properties whose market value is not more than double that amount. The move which is expected to boost affordable housing for lower and middle income groups was announced by Finance Minister Pranab Mukherjee. The estimated cost of the measure to the exchequer will be around Rs. 1,000 crore. Mukherjee also announced a tax holiday under section 80 IB (10) of the Income Tax Act for ongoing infrastructure projects, which were approved between during financial year 2007-08, if these projects are completed on or before March 31, 2012. The minister has urged the developers to pass the tax benefits to customers. Renu Sud Karnad, Joint Managing Director of HDFC Bank, said, "With the real estate segment directly or indirectly supporting around 269 large and small industries, the measure will have a positive impact on the economy. Also, with the fear of below normal rainfall haunting, a step like this is a well-timed one." The government has also taken off tax burden on construction of new roads and repair of existing ones, which is effective immediately.
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