5 Tax Savings That Come From Owning A Home
Are you looking forward to purchasing your first property? Well, this brings you various tax benefits, thus allowing you to manage your cash flows in a much better way.
The blog highlights all the tax savings that you can claim while taking a home loan.
Deduction on interest
If you have bought a house on loan, you are allowed to claim a deduction of the interest component in your EMI. All the tax benefits can be claimed only if you have ownership in the property. However, if the concerned property is under construction, the benefits can be claimed starting the year that involves the completion of the construction. The loss obtained from the interest payments can be adjusted against your income which in turn reduces your tax income extensively.
Deduction on pre-construction interest
Even if your house is under construction, you can claim the pre-construction interest in the same year. You can claim it in 5 equal installments, and make sure not to exceed the amount above ₹ 2 lakh if you are using the house as your own residence.
Deduction on principal repayments
You can claim your EMI component that goes towards principal. By summing up the taxable income of the year, you can claim the deduction under section 80C of the Income Tax Act.
Deduction on stamp duty and registration charges
Another deduction that you can claim under section 80C is for the payment associated with stamp duty and registration charges. Make sure to claim them only in the year when payments were made.
Deduction under Section 80EE
This tax benefit is applicable only to the first time property owners with the house value ₹ 40 lakh or less in addition to the amount loan of ₹ 25 lakh or less. Another point that you need to notice is that the total deduction under this section cannot go beyond ₹ 1 lakh.
Unnati Fortune Group, in line with the new I-T law, completely assists the first time home buyers in saving their income tax in the best possible manner. Benefits include recovering the income-producing property cost through depreciation, borrowing against real estate assets, and many more.