Interest on Housing Loan increase to Rs. 200000

The existing provisions
contained in section 24 of the Act provide that income chargeable
under the head “Income from house property” shall be computed after making
certain deductions. Clause (b) of the said section provides that where the
property is acquired with borrowed capital, the amount of
any interest payable on such capital shall be allowed as deduction in computing
the income from house property. The second proviso to clause (b) of
the said section, inter-alia, provides that in case of self occupied
property where the acquisition or construction of the property is completed
within three years from the end of the financial year in which the
capital is borrowed, the amount of deduction under that clause shall not exceed
one lakh fifty thousand rupees.

There has been
appreciation in the value of house property and accordingly cost of
finance has also gone up.
Therefore, it is
proposed to amend the second proviso to clause (b) of said section 24, so as to
increase the limit of deduction on account of interest in respect of property
referred to in sub-section (2) of section 23 to two lakh rupees. 

This amendment will
take effect from 1st April, 2015 and will, accordingly, apply in relation to
the assessment year 2015-16 and subsequent assessment years.
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