As the date of February 1, 2026 is approaching, the heartbeats of crores of home loan holders and middle class of the country are increasing. Finance Minister Nirmala Sitharaman is about to present her ninth budget, and this time the biggest suspense rests on home loan and tax deduction. Amidst the rising house prices and interest rates in the Indian real estate market, the common man’s eyes are on whether the government will play any masterstroke in this budget to reduce the EMI burden.
1. Interest subvention range: Demand from Rs 2 lakh to Rs 5 lakh
Currently, a maximum exemption of Rs 2 lakh is available on home loan interest under Section 24(b) of Income Tax. This limit has not changed from the year 2014-15. Property experts and organizations like CREDAI say that house prices have doubled in the last 10 years, so this limit should be increased to at least Rs 4 lakh to Rs 5 lakh.
The budget does not directly decide the interest rates of banks (this is the job of RBI), but the policies of the budget definitely decide your effective EMI.
- Cheap House: If the government changes the definition of affordable housing (currently Rs 45 lakh) to Rs 65-75 lakh, then more people will be able to come under the ambit of subsidy and cheap loans.
- Tax Saving: If the tax deduction limit increases, your tax savings will increase, thereby reducing the net burden of EMI on your pocket.
3. Section 80C and Principal Repayment
A rebate of Rs 1.5 lakh is available on the principal amount of home loan under Section 80C. The problem is that this Rs 1.5 lakh also includes PPF, LIC and children’s fees. The demand is that a separate section should be created for the principal amount of home loan, so that home buyers can get concrete relief.
4. Suspense on the new tax system
At present, there is no exemption on home loan interest in the new tax system. The biggest hope of the middle class is that the government should start giving the benefit of deduction on home loan and insurance in the new tax regime also.
Latest Business News