Are you a first time home buyer? Then you would have several factors to consider before buying a home like selling price, locality, budget, repute builders and many more. Amongst all, “Saving Tax” would be the prime concern for any new home buyer. When you invest in a property, be careful about the tax implications that come along with your property purchase.
Are you in your early 20s, then this would be the right time for you to invest in a property. Ensure that your income tax investment is linked to your real estate property which would help you save your hard-earned money. At many instances, a home buyer is ignorant about tax deductions and fails to pay attention on it during property transactions. A few tips to get an idea how to reduce your tax burden.
What are major tax savings that could be claimed by a first time homebuyer?
Interest Deduction – If you own a property, you could enjoy the maximum tax benefits. In case, if you have opted a bank loan to own a property, you could claim up to a maximum of Rs 2,00,000 on loan interest. To claim this amount, you should be the owner of the property as well as the borrower of the loan.
Pre-construction deduction – If one has invested in an under-construction property, he could claim the deduction on interest, only after the construction is completed. However there is an added advantage – where you have the benefit to claim the interest in five equal installments by summing up the whole pre-construction interests.
Principal repayment deduction – Besides interest, deductions are also available on principal repayments. Under the section 80C, the maximum amount of Rs 1,50,000 and the principal repayments can be claimed.
Registration and stamp duty process – During a property purchase, the amount paid for registration and stamp duty process could be claimed for repayment. Rs 1,50,000 is the total limit that could be claimed which has to be proceeded within a year.
Additional benefit – For new home buyers, a one-time gross deduction from the total income is granted up to the limit of one lakh INR which is not claimed in the previous year, could be claimed in the current year.
When there are so many benefits for a first time home buyer, why not invest in a property that comforts you with a secured future. Invest in a property and save your tax!!!