First time home buyers to get additional tax break of Rs 1 lakh

Tax break will be over and above the Rs 1.5 lakh deduction allowed for self-occupied properties under section 24 of Income-tax Act

Finance Minister P Chidambaram today raised tax deduction limit for first time home buyers by Rs 1 lakh to promote the housing sector.

"...A person taking a loan for his first home from a bank or a housing finance corporation up to Rs 25 lakh during the period April 1, 2013 to March 31, 2014 will be entitled to an additional deduction of interest of up to Rs 1 lakh," he announced while presenting Budget 2013-14 in Parliament.

"If the limit is not exhausted, the balance may be claimed in 2015-16. This deduction will be over and above the deduction of Rs 1.5 lakh allowed for self-occupied properties under section 24 of the Income-tax Act," he said.

The move is likely to promote home ownership and give a fillip to a number of industries including steel, cement, brick, wood, and glass besides providing jobs to thousands of construction workers.