The finance minister proposed an additional tax deduction of Rs 1.5 lakh beyond Rs. 2 lakh on interest on loans borrowed up to 31st March 2020 for purchase on an affordable housing valued up to Rs. 45 lakh. So, the total deduction will be Rs. 3.5 lakh. This will translate into a benefit of around Rs. 7 lakh to the middle-class home-buyers over their loan period of 15 years.
Also, an additional tax deduction of Rs. 1.5 lakh was proposed on interest payments for buying electric vehicles. She said that this amounts to benefit of around Rs. 2.5 lakh over the loan period for the taxpayer who takes loans to purchase an electric vehicle.
She also mentioned that the GST rate on electric vehicles will be lowered to 5% from 12%.
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