Buying a house in India is not only a dream, but it is also one of the biggest economic responsibilities of life. Many people buy property due to emotionally engagement, but very few people are aware of the tax exemption and financial strategies related to it. If planned properly, tax can be availed while buying a house. Let's know 5 such smart and effective ways, which can make property investment a profitable deal.
1. Register in the name of wife and get a discount in stamp duty
In most states, the stamp duty is less due to registration of property in the name of women. For example, some states have a stamp duty for men, while 5% for women. If you register the house in the name of both wife or jointly, then not only stamp duty is left, but under Section 80C, there is also a tax exemption of up to 1.5 lakh. If both husband and wife are co-owners, then this discount can be up to 3 lakh.
2. Interest on home loan and tax exemption on both
- If you buy a house by taking a home loan, you are entitled to dual tax exemption:
- Tax exemption on interest up to 2 lakh under section 24 (b).
- Tax exemption on Principal up to 1.5 lakh under Section 80C.
- If the loan is in the name of both husband and wife and both have different income, then this benefit can also double. That is, a tax exemption of up to 7 lakh in the same house is possible.
3. Buy one house and buy another, then relief from capital gains tax
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Many times people sell old houses and buy a new house. In such a situation, tax exemption is received under Section 54 of Income Tax. If you have invested in another residential property within 2 years by selling Residential Property, then capital gains tax is relieved.
If you sell the plot and buy a house, then you can also get a discount under Section 54F.
Keep the property for 24 months, then sell
If you keep the purchased property with you for at least 2 years (24 months), then selling it is levied by a long -term capital gains (LTCG), which is only 12.5%. Earlier, short term capital gains tax can be up to 30% according to your income tax slab.
Therefore, holding the property for the right time is beneficial.
5. Take home loan and put your capital a better place
If you have enough money to buy a house, taking a home loan can be a strategic decision. If the loan interest rate is 8-8.5% and you invest your capital in a mutual fund or stock market from where there is a possibility of getting 10-15% returns, you can earn additional profit.
Although there is a risk in this method, it is necessary to take the right research and advice before investing.
Bonus Tip: Increase property value through tax planning
While investing in real estate, smart tax planning can not only get discounts in taxes, but can also improve your investment return. Make a wife a co-owner, manage home loan wisely, and to buy and sell property with timing-all these things can make you a successful real estate investor.
