Budget 2026: Can Home Loan Tax Relief Skyrocket to 5 Lakh Rupees?

Real estate experts are looking toward Budget 2026 with high hopes for policies that could lower EMIs and speed up home deliveries. The housing sector has been under significant pressure, with the middle class facing high property prices and rising interest rates. To alleviate these burdens, experts are calling for several key changes, including raising the home loan interest tax exemption under Section 24b to 5 lakh rupees and granting the sector industry status. These proposals aim to make homeownership more accessible and affordable for the average Indian.

The current home loan interest tax exemption under Section 24b is capped at 2 lakh rupees. While this has provided some relief, it is often insufficient for many middle-income families who are struggling with high EMIs and property costs. By increasing the tax exemption to 5 lakh rupees, the government could significantly reduce the financial burden on borrowers. This would not only help existing homeowners but also encourage more people to enter the housing market.

Granting the real estate sector industry status is another crucial demand. This move would provide the sector with access to various benefits, such as easier access to credit, tax incentives, and infrastructure support. These advantages would help developers to complete projects more efficiently and reduce delays in home deliveries. Additionally, it would stimulate investment in the sector, leading to job creation and economic growth.

The real estate market has been facing challenges due to a combination of factors, including high property prices, increased interest rates, and a slowdown in demand. These issues have particularly affected the middle class, who are often the primary buyers in the housing market. By implementing the proposed changes, the government could provide much-needed relief to this segment of the population and rejuvenate the housing sector.

One of the primary concerns for potential homebuyers is the affordability of EMIs. High interest rates and property prices have made it difficult for many to afford a home, especially in urban areas. By increasing the tax exemption, the government could help reduce the overall cost of home loans, making it easier for people to manage their monthly payments. This would also help to stimulate demand in the market, leading to increased sales and a boost in the sector's performance.

Moreover, the real estate sector plays a vital role in the overall economy. It is one of the largest employers and contributes significantly to GDP. By providing the sector with industry status and increasing the tax exemption, the government could help to create a more stable and prosperous housing market. This would have a positive ripple effect on other industries, such as construction, furniture, and appliances, which are closely linked to the real estate sector.

In conclusion, the upcoming Budget 2026 presents a significant opportunity for the government to address the challenges facing the real estate sector and the middle class. By raising the home loan interest tax exemption to 5 lakh rupees and granting industry status to the sector, the government could make homeownership more accessible and affordable. These measures would not only benefit individual households but also contribute to the overall economic growth of the country.