Buying a home is a big financial decision. Whether you’re buying one for yourself or as an investment. The government fortunately has offered several income tax benefits for homebuyers. These benefits vary according to the property type, nature of construction and home loan amount. For instance, a first time home buyer can claim more tax deduction when buying an under-construction property rather than a ready property. Which of course makes Casa Amora a perfect choice.
Here’s everything you need to know to make best use of these tax saving benefits.
Sections you should totally check out
This section deals with the amount paid as repayment of home loan by an individual after tax deduction.
The maximum tax benefit allowed at present is Rs 1,50,000. The tax benefit is allowed only after the construction has been completed and the completion certification received by the taxpayer.The deduction for interest payment on the home loan is also allowed if the loan is sought for the extension or renovation of a house, but only after the construction is complete of course.
This section deals with tax benefits on interest paid by an individual on his home loan. The maximum tax benefit allowed is Rs 2 lakh. The home loan can be taken for construction, reconstruction, repair, renewal, or purchase of a residential property.
In case the property for which the home loan is sought is not self-occupied or rented out, no maximum limit has been prescribed and the whole loan interest can be claimed for deduction.
If you’re a first time home buyer. Then this section is ideal for you. You can use this scheme to get an additional deduction of Rs 50,000 over and above the tax deductions that you got via the first 2 sections above
The deduction is allowed only if the value of the property purchased is less than Rs 50 lakh and the value of the loan sought is less than Rs 35 lakh. The benefit will be available till the time the home loan is repaid.
A Second Home Loan Bonus
You might not have known but there is complete different tax implication on buying a second house. If you have two properties, one of them (as per your wish) will be considered as on rent even if its not in reality.
There will be notional rental income of whoever owns the two properties and tax is applicable on it. The best part is you can claim the entire interest (paid for 2nd house) that has been paid for the financial year. So no upper limit for the interest paid in that year. Isn’t that sweet?
You might want to read the article Tax benefits on Loan taken for 1st & 2nd House for more info on this as its somewhat complicated. Still unsure on the nitty details? Call us on 839-0154-777 for a walkthrough on buying your first home.