How To Maximize Your Tax Benefits As A Home Buyer? s
Real estate investments carry both monetary and emotional value. Since it is a big financial decision, there is a way homebuyers can unburden themselves by maximizing their tax benefits. Here’s everything you need to know about tax saving as a homebuyer –
1. Taking a home loan can be tax efficient
Start with understanding the three major sections of the Income Tax Act that primarily cover the tax gains under residential properties –
• Section 80C
Under this section, the taxpayer can claim tax benefits on the repayment of the principal amount of the house. It is only applicable on completely constructed properties and the tax benefit can be claimed only after the taxpayer has received the completion certificate. Currently, the maximum tax benefit that can be claimed under this section is Rs.1.5 lakhs and there is no minimum limit.
• Section 24B
This section allows you to claim tax exemptions on the interest you pay on the home loans. The maximum tax benefit allowed under this section for a self-occupied property is Rs.2 lakhs and the home loan can be availed for an under-construction, reconstruction, repair or purchase of a housing property.
2. Claim more tax deduction by investing in an under-construction property
For an added advantage in tax deductions, it’s best if you consider investing in an under-construction property as you will then be liable to claim tax benefits up to Rs. 2 lakhs in a year and up to Rs.1.5 lakhs under section 80C. In this case, the interest deduction will not be allowed from the taxable income till the construction is not entirely complete.
3. Tax benefits on sale of property
Since real estate investments require a huge sum of money, the sale of a property can result in a big capital gain, which would eventually result in you paying the capital gains tax on this monetary gain unless you decide to reinvest it. Simply put, according to Section 54, you can claim tax exemption if you reinvest the entire capital gain amount into buying or constructing another property. However, this tax benefit can be claimed only once in a lifetime.
Make the most of your tax benefits by investing in upcoming residential properties. Not only can you save tax money, but also move one step closer to building your dream home. If you’re on the lookout for luxurious apartments for your growing family, House of Hiranandani has some of the best upcoming residential projects across major cities. Among recent developments, check out their new projects in Bangalore and new projects in Chennai that offer creatively crafted modern homes in self-sufficient neighbourhoods. Give yourself the opportunity to live an elegant life with a redefined standard of living, only at House of Hiranandani.