Real Estate Investment: Know More About The Tax Benefits


Everyone desires a home of their own. Apart from providing stability in life, privacy, and contentment, a home is also a lucrative investment option. Further, whether it is a villa or residential projects in Mumbai, if you purchase a home against loan you will get many tax benefits and exemptions. This will help you save money. Below-mentioned are a few tax benefits which you need to keep in mind.

Section 80C

An individual can claim tax benefits under section 80C by repaying the principal amount. According to this section, the individual can claim a tax exemption of up to Rs 1.5 lakh. Deductions can be claimed by the homebuyers on the investments that have been done in the return of income. However, it should be noted that the income needs to be of the particular year during which an investment has been done by the individual.

Capital Gain

Capital gain can be either classified as a short term gain or a long-term gain. As per the duration for which the house is held will determine at what rate the tax will be levied on the capital gains. The short-term capital gain is decided on the tax slab because it is taxed as an individual’s ordinary income. But, in case of long-term capital, a number of factors are taken into consideration like the person’s marital status, income among others.

Section 24

Under Section 24, an individual can claim tax deductions on the interest that he or she pays on home loans. Known as ‘Deductions from income from house property, this section allows exemptions from any source of  income that is earned through the property. Section 24 permits only two kinds of deductions - Net Annual Value and Interest on Borrowed Capital. Of these, the former is a standard deduction.

Depreciation

Though investing in property comes with a number of benefits but among these depreciation is the most beneficial. This is one of the biggest tax exemptions and enables an individual to reduce his tax liability. This results in a substantial increase in cash flows. With the passage of time, the property begins to show signs of wear and tear. Only that property can be written off which is income-producing based on wear and tear.

Owning a home is a lucrative investment option as it has many tax benefits. Apart from improving your lifestyle, a home will also help you save a lot of money through tax exemptions. Ghodbunder Road has recently emerged as an attractive real estate destination. Builders are coming up with various projects ranging from the premium to the 2 BHK in Ghodbunder Road, Thane. In the times to come, the region will see an appreciation in property.

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