The Union Budget made a revelation of interest subsidy on housing loans according to the individual’s annual income slab. Now, it is made clear that the interest subsidy scheme will be applicable on all loans taken or sanctioned after January 1’ 2017.
Prime Minister Narendra Modi had already announced the interest subsidy benefit on December 31’ 2017 after the duration of demonetisation was over. The Finance Minister Mr. Arun Jetly also made clear the interest subsidy slab in his Union Budget speech in the parliament.
Now further clarification has come from the government that anyone who has applied and got a home loan sanctioned after January 1 will be eligible for the interest subsidy benefit. However, it is also made clear that for availing the subsidy, individual has to have annual income less than Rs 18 lakh and the interest subsidy will be 3-4%. Those flats with floor area up to 960 square feet and 1,184 square feet will be eligible for interest subsidy of 3% and 4% respectively.
Noteworthy that the interest subsidy benefit can also be availed by all unmarried individuals, earning young adults who come under the income limit of Rs 18 lakh per annum. The subsidy will be applicable to acquisition of any pre-built house or construction of a new house including repurchase.
The recent development in the housing loan subsidy is sure to push housing demand especially in urban areas. The continued downfall in the real estate sector may see a reviving future in the coming times. According to sources in housing finance sector though government had already planned out the policy on interest subsidy in consultation with several banks and financing institutions, the same was not declared due to election code of conduct.