Know your Tax Benefits as a Home BuyerOctober 7, 2020

Know your Tax Benefits as a Home Buyer

Believe it or not, there is an up-side to taking home loans too as they come with multiple tax benefits. The government may be charging tax on most things, but the good thing is that they also offer tax breaks as an incentive to homebuyers. These tax breaks help in reducing outgoing tax, making management of your cash flows that little bit better.

Unknown to many, here are some tax deductions that you can claim back when you take a home loan:

Deductions on the Interest paid

In case you have taken a home loan, then the interest component on the EMI that you pay each month is claimable as a tax deduction; but for a tax deduction to become applicable, you need to be both the owner of the property as well as the borrower of the loan against the property. However, do note that taxes can only be claimed provided you are using the property for personal use and not for passive income like renting.

Whatever interest you pay on your EMIs eventually become deductible from your annual earnings. If your EMI interest component is 1.8 lakhs/annum and your salary is 8 lakhs/year, then your annual taxable income becomes 8,00,000 – 1,80,000 = 6,20,00 lakhs/year. This shows there are benefits to taking home loans too!

Deductions on repayment of the Principle amount

That part of your home loan EMI which makes up the principle amount is also eligible for tax claims under Section 80C of the Income Tax Act. However, only a total sum of 1.5 lakhs is claimable for tax deductions per year.

Deductions on Registration charges and Stamp duty

Aside from tax benefits on interest paid as well as on the principle amount, you can further avail of deductions on stamp duty and registration charges (which come down to a good sum!). The downside is that they can only be claimed in the year they were paid.

Deductions on Pre-construction Interests paid

You can claim pre-construction interests paid also once the construction is completed. This amount should however, not exceed 2 lakhs and is only applicable if the said property is for personal use.

Deductions when in Wife’s name

To encourage financial security for women, additional tax breaks are being offered if a woman is an owner or joint owner of the property. Aside from the initial home loan getting cheaper when taken in a woman’s name, extra benefits up to 1.5 lakhs can be availed every year.

RECENT POSTS
ARTECH REALTORS

properties to invest in Trivandrum

Top Residential Properties to Invest in Trivandrum

Trivandrum, the capital of Kerala, is a bustling city that has seen significant development over the years. The city is… Continue reading Top Residential Properties to Invest in Trivandrum

Read More
home-insurance

A Definitive Guide to Home Insurance

Home insurance is a crucial aspect of home ownership in India that is often overlooked. It is a type of… Continue reading A Definitive Guide to Home Insurance

Read More

Related Projects

A few of our inspiring projects

Apartments in Trivandrum

Being the state political capital, an educational hub as well as home to Kerala’s largest and rapidly-expanding IT hub, Artech has realized the growth potential of Trivandrum as a prime spot for real estate investment. Artech builders in Trivandrum offer a number of lavish and eye-popping apartment projects located in classy niche areas to inspire you.

More
Information
Apartments in Thrissur

The city built around the base of a 65-acre hillock is steeped in rich cultural and spiritual history. Aside from being known as the cultural hub of Kerala, Thrissur is also known as a major business center. Artech offers Thrissur, one of its finest creations to-date, the Artech Gateway, featuring exclusive lifestyle apartments.

More
Information
Apartments in Kollam

Located on the banks of the scenic Ashtamudi Lake, this ancient city dating back to the biblical times, has a strong commercial reputation. The verdant beauty of this city also attracts many people to set-up homes here. As flats in Kollam are in great demand, Artech Realtors have a number of luxurious projects offering superior homes with amazing blue vistas to its residents.

More
Information
Apartments in Kottayam

Kottayam has always been at the forefront for education and literacy. Aside from this, it’s a peaceful town that thrives on commerce. Artech Realtors have given Kottayam their first taste of high-end luxury living with Artech Rio. The unending views of the surrounding greenery, the meandering river and outstanding amenities makes life in these classy apartments one-of-a-kind.

More
Information
Apartments in Thiruvalla

Thiruvalla, which has earned the moniker the ‘Land of the NRIs’ is situated on the banks of the Pamba and Manimala rivers. With a paucity of suitable homes for the cream of the society, there was a glaring need for luxury flats in Thiruvalla. The blissful Artech Kaazhcha apartments offer an inspiring mix of high-end comfort and luxury.

More
Information

DISCLAIMER

The information provided on this website is meant for general guidance. Though we have taken utmost care on the accuracy of the contents, the customer should make an autonomous assessment of the contents. However, the prospective buyers should rely upon the terms and conditions of the sale and construction agreement between the Builder and the Client.

The visuals of the projects symbolize artistic impression only. The information contained herein including the fittings, finishes, features, floor size and color etc. in the visuals are subject to change. However, the plans & specifications indicated in the Builder and Client agreements are final and we have not authorized anyone to make any oral commitments or promises on our behalf in regard to the plans and specifications of the apartments/projects.

For any clarification please feel free to call +91 9847 600 600 or walk into our offices. Our representatives will always be at your service.