Owning a home offers a sure degree of psychological and psychological satisfaction and it creates a way of social safety among the many house homeowners. However, in accordance tax and funding consultants, shopping for a home to keep away from revenue tax isn’t a good suggestion. They stated that if somebody isn’t positive about how a lot cash one should shell out from one’s pocket, shopping for a house could end up a nightmare. They additionally stated that if somebody isn’t positive about one’s length in a metropolis, it is higher to stay in a rented lodging than shopping for a house.
Speaking on why and when you can purchase a house; Mumbai-based tax and funding skilled Balwant Jain stated, “Banks don’t approve more than 80 per cent of the house property cost as home loan. So, a home loan applicant needs to shell out the surplus 20 per cent property cost from one’s savings. Also, there is stamp duty and some other miscellaneous charges like brokerage fee, etc., which is also not funded in bank loan. So, a home loan applicant has to look at one’s savings before applying for a home loan.”
Highlighting different components {that a} house mortgage applicant should contemplate whereas shopping for a house, Balwant Jain stated, “If the person willing to buy home is posted in a city for short duration or it has been posted in a city where it don’t intend to settle, then living in a rented accommodation is a better choice. Real estate transactions have some hidden costs like stamp duty, registration charges, brokerage for sale and purchase of the house, etc. that can’t be recovered.”
Ashish Narain Agarwal, Founder & CEO at PropertyPistol.com stated, “Buying a home is a very calculated investment in an individual’s life and it primarily depends on the person’s age, regular income and the market situation during which he/she wants to buy a home.”
On whether or not it’s sensible to purchase house to keep away from revenue tax; SEBI registered tax and funding skilled Jitendra Solanki stated, “Buying home to avoid income tax may be or may not be advisable because it depends upon the investments and other liabilities of an earning individual. As of now, a taxpayer is allowed to claim income tax exemption on up to ₹1.50 lakh home loan principal repayment in one financial year under Section 80C of the income tax act whereas the taxpayer can claim income tax benefit under Section 24(B) on up to ₹2 lakh home loan interest repayment in one financial year. Since, Section 80C exemption includes other investments like ELSS mutual fund, provident fund, LIC, school fee of the child, etc., most of the times it has been found that a home loan applicant don’t get able to claim exemption up to ₹1.5 lakh on home loan principal repayment. So, its home loan interest of ₹2 lakh that is mainly considered an income tax benefit for a home loan applicant.”
SEBI registered skilled went on so as to add that within the case of revenue tax profit declare beneath Section 24(B), one has to have a look at how a lot revenue tax outgo she or he is saving by shopping for a house. He stated that if an individual is falling in revenue tax slab of 30 per cent, then shopping for a house to keep away from revenue tax is advisable. However, within the case of revenue tax slab falling round 10 per cent to twenty per cent, one ought to have a look at shopping for particular person mediclaim for his household together with his senior citizen dad and mom. This will allow him to say revenue tax exemption on annual mediclaim premium paid as much as ₹75,000 ( ₹25,000 for himself and ₹50,000 for senior citizen dad and mom). Apart from this, one can go for NPS funding in addition to it permits an extra revenue tax exemption beneath Section 80 CCD on funding as much as ₹50,000 in a monetary 12 months.
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