Tax concessions to boost housing finance businessTax concessions to boost housing finance business
Apnaloan.com Research Bureau
02 May 2008
A Reserve Bank of India's report titled, 'Macroeconomic and Monetary Developments 2007-08' says that the growth in the housing finance industry has slackened from 25 per cent in 2006-07 to 12 per cent in 2007-08.
According to industry analysts, the slowdown of business can be attributed to rise in non-performing assets and issues in loan recovery.
In what can be seen as an effort to encourage the home loan borrower to pay his EMIs, tax concessions can be seen as an incentive.
Most housing finance companies are showing good business. Housing Development Finance Corporation Ltd's (HDFC) loan disbursements in 2007-08 were 26 per cent higher at Rs. 32,875 crore; and loan approvals up 28 per cent at Rs. 42,520 crore. Loan approvals and disbursements grew at 30 per cent and 27 per cent respectively in 2006-07, according to media reports.
LIC Housing Finance showed an increase of 41 per cent in the home loans sanctioned, at Rs. 8,618 crore and a 38 per cent jump in disbursed loans at Rs. 7,071 crore. In 2006-07, sanctioned loans had increased by 18.6 per cent while disbursed loans had risen by just 4.67 per cent.