Interim Budget 2024-25: What's housing for middle class?

The proposal for the new housing scheme by the NDA government once again boasts of the Sections 80EE and 80EEA along with PM Awas Yojana that the Center introduced in 2016 and 2019, in the Income Tax Act.

"Our Government will launch a scheme to help deserving sections of the middle class “living in rented houses, or slums, or chawls and unauthorized colonies” to buy or build their own houses," said Finance Minister Nirmala Sitharaman on Thursday morning, as she delivered the Interim Budget speech curtailing details for the year 2024-25.

There have been no changes made to the direct and indirect taxation, a point that most middle class families or individuals were keen on.

Regardless, the proposal for the new housing scheme by the NDA government once again boasts of the Section 80EE that the Center introduced in 2016, in the Income Tax Act.

The 80EE deduction is for first time homebuyers and offers additional deduction on the interest paid on a home loan, subject to certain conditions.

In 2019, the government brought in a sub-section 80EEA— deduction for affordable housing. This 80EEA deduction was made available over and above the deduction of Rs 2 lakh under Section 24, allowing an eligible taxpayer to claim deduction of Rs 3.5 lakh on the interest paid on housing loan.

The conditions a middle class homebuyer had to fulfill to claim Section 80EEA deduction are as follows: the stamp duty value of the property must not exceed Rs 45 lakh; the taxpayer should not own any residential property on the date the loan is sanctioned; and the home loan must be taken between April 1, 2019, and March 31, 2022.

Sitharaman in her Interim Budget speech also reiterated details about the Pradhan Mantri Awas Yojana- Gramin (PMAY-G) which came into effect in April 2016, and that boasts of Housing for All. While the finance minister recalled that under the scheme the Central government aims to construct 2.95 crore pucca houses with basic amenities by March 2024— the deadline is approaching in a month— that also being the month of General elections.

“Despite the challenges due to Covid, implementation of PM Awas Yojana (Grameen) continued and we are close to achieving the target of three crore houses. Two crore more houses will be taken up in the next five years to meet the requirement arising from increase in the number of families,” Sitharaman read out to the House on February 1, 2024 as she presented the Interim Budget seeking vote on account.

Meanwhile, economically Weaker Section (EWS)/Low Income Group (LIG), Middle Income Group - I (MIG-I) and Middle Income Group-II (MIG-II) are eligible for the scheme. The scheme claims to extend specific subsidies on home loan interest for up to Rs 2.67 lakh to various categories of homebuyers.