With the property prices and interest rates rising with each passing year, there is need to revise the limit, sources said.
In order to check the declining growth rate, the industry associations have demanded raising the tax limit ceiling for the housing loan.
To boost housing sector credit, the government is contemplating to enhance income tax exemption for up to Rs 3 lakh paid as interest on housing loans in a year, from the existing limit of Rs 1.5 lakh.
The government is considering to raise the tax deduction limit for housing loans in the coming Budget, sources said.
The Budget is scheduled to be submitted on March 16. At present, a deduction of up to Rs 1.5 lakh is available from taxable income towards interest on loan taken for house.