By Dr Sanjay Chaturvedi, LLB, PhD
Accommodation Times Bureau
In the budget speech, Finance Minister gave very important data on who are eligible for home loan. FM Arun Jaitley said in his Budget Speech that the number of individuals filing return for salary income are only 1.74 crore, which means only 1.74 cr persons are eligible for Home loan.
As against 5.6 crore informal sector individual enterprises and firms doing small business in India, the number of returns filed by this category are only 1.81 crore, which means only 1.81 cr people are eligible for home loans.
Among the 3.7 crore individuals who filed the tax returns in 2015-16, 99 lakh show income below the exemption limit of Rs 2.5 lakh p.a., 1.95 crore show income between Rs 2.5 to Rs 5 lakh, 52 lakh show income between Rs 5 to Rs 10 lakhs and only 24 lakh people show income above Rs 10 lakhs. If a house is costing average at one crore in urban centres and cities then taking a loan of Rs85 lakh should be compulsory to purchase a house. The capacity of a person who earns Rs10 lakh a year to avail a home loan is just Rs50 Lakh according to credit policies of housing financiers. Which means non of the above qualify to take home loan above Rs50 Lakh and a house costing one crore and above needs Loan to Value taken as 85 then he has to put funds from his own sources.
Of the 76 lakh individual assesses who declare income above Rs 5 lakh, 56 lakh are in the salaried class. The number of people showing income more than Rs 50 lakh in the entire country is only 1.72 lakh. Of these 1.72 lakh people who have income above Rs50 lakh, almost 95% have their own homes hence only 5% of 1.72 lakh people are eligible to take home loan above Rs one crore. These people have already taken loans as Housing Finance market had witnessed 73% growth in 2005-6 to 2012-13.
There are no eligible taker of home loan. People those who have taken home loans and for saving their taxes are been restricted by Union Budget that deductions on home loan interest rates are not granted for second or third homes. There are conditions imposed to avail such deductions. Hence there is no incentives for people to take home loan.