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SBI eyes higher tax benefits for home loans

Wants separate category for tax sops on repayment of home loans

Abhijit Lele  |  Mumbai 

State Bank of India (SBI), the country's largest lender, wants the government to increase the upper limit for interest subvention (subsidy) of home loans from Rs 15 lakh to Rs 25 lakh.

To be eligible for subvention, the cost of the house should also be increased from Rs 25 lakh to Rs 35 lakh in metros, SBI said in its wish list for the Union Budget. Minister Arun Jaitley is slated to present the Budget on February 28..

Read our full coverage on Union Budget

SBI's home loan book stood at Rs 1,52,905 crore in December 2014, showing a 13.1 per cent growth over Rs 1,35,129 crore at the end of December 2013. 74 per cent of its loans are in the below Rs 30 lakh category.

Its housing credit portfolio has expanded at a compounded annual growth rate of 15.8 per cent over past five years.

SBI suggested separate tax benefit scheme for repayment of home loans. It asked to the government to provide additional deduction of Rs 50,000 over and above the existing limit of Rs 1.5 lakh for recovery of principal component of home loans.

The deduction of interest paid on home loan should be allowed from the date of commencement of the payment of interest / principal, it said.

Besides, the entire amount paid for stamp duty and registration charges for buying houses should be allowed for statutory deduction while computing income tax, SBI noted.

To encourage bank push for home loan in rural areas, it said the credit guarantee scheme for housing needs to be extended to cover affordable housing in rural areas. The government should seriously contemplate bringing housing loan for first-time buyers under the overall priority sector ambit, it added.

In order to meet the target of 'housing for all' by 2022, single-window clearance system should be implemented for all statutory and administrative approvals for affordable housing projects, SBI noted.

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First Published: Tue, February 24 2015. 00:47 IST