Buying a home is the safest form of investment for any individual. It can earn you plenty of benefits in the long term. This includes both personal benefits and also financial benefits. ‘If you rent a home all your money will go to the landlord in the form of rent. You cannot enjoy any benefits in the form of tax. This is also a kind of loss for the individual as the exchange is mutual. On the other hand, if you buy a home, you can enjoy several tax benefits.
Availing tax benefits with buying a home is highly helpful. Here are some of the things you may consider to enjoy these benefits. Using these tips you can claim large tax benefits.
Joint benefits
A home can be bought jointly, maybe with your parents or family members. In this case, you can claim for deduction on a home loan on behalf of the joint member too. This will help you gain a double benefit for the total home loan amount. So you can buy a property along with a joint member who will be eligible to pay the loan.
This is one of the most preferred ways to avail a tax benefit through the property.
Tax benefits for the pre-construction phase
It is possible to claim tax benefits and deduction of interest even in the pre-construction phase. This means you can get a tax benefit from the day of construction until the project is completed. This is available in the form of equal instalments for a certain period of time.
Deductions for the principal amount
Under the Income Tax Act, it is possible to get a deduction for the principal amount. This can be availed for a maximum amount of ₹1.5 lakhs. The property brought using this policy should not be sold within a span of 5 years. In that case, this deduction will be cancelled.
An additional deduction can also be availed for large amounts from ₹35 lakhs to ₹50 lakhs. This is the total loan amount. A special deduction can be availed for this kind.
Property tax
When you buy a property instead of renting it, you will face something called the property tax. This is paid to make sure the services like electricity, water etc are provided. But for a rent house, the owner might ask for a deduced amount to pay this tax. The property you buy will also have a loan to be repaid. Additionally, these taxes are also paid. That is why it is important that you look for tax benefits in a property.
It is definitely worth getting tax benefits for a home that you buy. All you must do is go through the rules and regulations for every deductible tax. This will help you gain the maximum benefits for your home. This will involve minimal paperwork too. Only then you will be eligible to get tax benefits at its fullest.