While under-constructed properties are available for a discount of around 15-20 percent as compared to a ready-to-move-in house, did you also know that there are tax benefits to be availed, post possession?
If you are planning to buy a property with a
lower budget and have no plans of moving in that house in the near
future, then financial experts would advise you to book a house in an
under-constructed project. While such properties are available for a
discount of around 15-20 percent as compared to a ready-to-move-in
house, another big advantage for salaried people is that after taking
possession of the property, this investment of yours would also help you
save on some taxes.
Deepali Sen, a certified financial planner
from Srujan Financial Advisers LLP, explains that when a person buys a
ready flat, he can claim the tax deduction under Section 80 C for
repayment of principal amount of housing loan to the tune of 1.5 lakhs
and around 2 lakhs for the interest paid on that loan in that financial
year. "No tax deduction is allowed under Section 24 for property, which
is still under construction. It is allowed only after the construction
is complete and the possession is handed over," she adds. This is
because according to the Income Tax Act, 1961, a tax payer gets a
deduction of 2 lakhs in respect of the interest paid on the housing loan
taken to acquire the house only if the house is in the physical
possession and belongs to the tax payer during the year. The maximum
limit of interest deduction a tax payer can claim in a particular year
is limited to the tune of 2 lakhs and will operate as a combined limit
for the interest of that year plus one-fifth of the construction period
interest.
Buyers have an option of paying only the
interest amount on the loan and the actual EMI starts once the
possession of the property is taken. However, if you have already
started paying regular EMIs before the completion of the project to
repay the loan amount earlier, you cannot claim any deduction for the
principal repayment that you made on the property while in the
under-construction stage.
Balakrishnan Venkataramani, a certified
financial planner from VENSIVA Financial Solutions explains that there
is one more condition to claim deduction of such an interest payment.
"The possession of the property should be completed within three years
from the end of the financial year in which the capital was borrowed for
acquisition of the house. If the possession of the house is received
after more than three years from the end of the financial year in which
the loan was taken, then only an interest of Rs 30,000 is deductible
each year."
Rajiv Raj, co-founder and director at
CreditVidya, explains, "If the first house is rented out, the income
received from the rented property is taxable and interest paid on a loan
taken for such a property is fully deducted. The other property, being
self-occupied, will have NIL income, but interest deduction on the
corresponding home loan will be limited to Rs 2 lakhs," he says.
To read more Mumbai and Thane Real Estate Resources, visit www.mchithane.org
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501, 5th Floor, Plot No - A-123/4,
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Thane (W) - 400 604, Maharashtra, India
Mobile :
(+91) 9833 4583 23
Telephone :(+91) 22 2580 6868
(+91) 22 2580 6865
E-mail: mchithane@gmail.com
Odyssey IT Park, Road No. 9,Wagle Estate
Thane (W) - 400 604, Maharashtra, India
Mobile :
(+91) 9833 4583 23Telephone :
(+91) 22 2580 6868(+91) 22 2580 6865E-mail: mchithane@gmail.com
