Ahead of Budget 2022, Indian Banks Association Chief Executive Sunil Mehta expects that the government should increase the exemption on home loan interest, citing various reasons while explaining how it eventually will help India in its growth story.  

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Mehta in his expectations said that people are buying a house through a home loan, which can get a big boost in the budget, as currently, under section 24, Rs 2 lakh interest is available on the home loan interest, which shall be increased to Rs 5 lakh in the upcoming Budget. 

The Union Budget 2022 is scheduled to be presented on February 1, 2022, by finance minister Nirmala Sitharaman in Parliament.  

According to the Chief Executive of IBA, there are many industries associated with the housing sector, so the interest exemption on home loans if increased, it eventually will be a booster dose for the Indian economy. 

Besides, Mehta also believes that the standing demand of the banking sector to get tax exemption on three-year fixed deposits should be brought in for a level playing field within lenders. 

Meanwhile, the economy will also benefit from the growth of the housing sector with the increase in house loan interest exemption, the IBA chief further added. 

Mehta also added that the old demand for tax exemption on fixed deposits of 3 years instead of 5 years, should be taken into consideration during Budget 2022. He pointed out, the government should give tax exemption on 3-year fixed deposits and make it a level playing field. 

Banks' deposit growth is good right now, so there is no liquidity concern at this time, however, demand continues, the group of all banks, Indian Bank Associations chief said in a comment. 

It is speculated that the realty sector may get a major boost in the Budget 2022, and because of it housing sector shall also be on the radar, Zee Business Managing Editor Anil Singhvi had said earlier.