New Delhi: Budget 2020 – For those looking for a home for years, 2020 can be a good year to share. The rates of major loans decreased, as did real estate prices. Plus, you get tax exemptions. Here is a look at how to give buyers new hope.
TAX BENEFITS ON PRINCIPAL
Identical monthly installments (EMI) are generally divided into capital (the amount you take as a loan) and interest (the cost of the loan service). In the event that you do not choose the new “simplified” personal income tax system, the manager is permitted as a deduction from the gross gross income (subject to a general limit under Section 80C with other eligible investments of Rs 1.5 lakh)
TAX BENEFITS ON INTEREST PAID
The interest due on “self-occupied” property is subject to a maximum deduction of Rs. 2 lakh under “income from home ownership”. This discount is not available under the new “simplified” personal income tax system.
This reduces the overall tax liability. But to claim this, it is necessary that the acquisition or construction be completed within 5 years of the end of the fiscal year in which the loan was taken, otherwise, the discount will be deducted at 30,000 rupees.
An additional tax discount of Rs. 1.5 lakh was provided for mortgage loans taken between April 1, 2019 and March 31, 2021, to purchase a home with a stamp tax value of Rs. 45 lakh. However, you should not own any other system.
If you have rented the property, the difference between the rent you get after adjusting the municipal taxes, the standard deduction and the total interest on the home loan is “home ownership loss”, which can offset up to 2 rupees. Lakah against his other income, says the salary.
The loss under the main “home ownership” can be offset by other income addresses (including salary income) in the same year if you do not choose the new “simplified” personal tax system.
Five things about loan incentives for the home you should know
1) Even a loan taken from an employer, friend, private lender is eligible for a discount, but only an interest component and not the principal amount. You will need a certificate from the lender.
2) Booking an apartment under construction is sometimes cheaper. The I-T Law allows you to claim the total interest paid during the period prior to delivery as a discount in five equal installments from the fiscal year in which the construction ended or acquired your apartment (this generally indicates the date of acquisition). Of course, the maximum that you can claim as an annual discount is still Rs 2 lakh in the case of self-ownership (but you may be eligible for the additional interest discount, as shown).
3) It makes sense to buy the new apartment together; for example, with your wife, each of you is entitled to a deduction of Rs 2 lakh for the interests funded by each of you, as explained above. In the event that you have a child working and the bank is ready to split the loan in three ways, all three can benefit from a discount of up to 2 rupees each in a separate property. Add the additional benefit (if this applies to rental property or is considered to be rented), and savings can be significant.
4) No theoretical rent will be added to the taxable income of your second independent residential property. Therefore, if you do not find the tenant ready, you can keep him busy. Note that this room for maneuver is only available for up to two homes. The third non-rented home will continue to attract taxes on “appraised value”. In other words, the tax will be calculated on the expected market income.
5) The total loss of home ownership that can be adjusted with any other income (salary, other source) has been limited to 2 lakh rupees. Additionally, if you cannot offset the interest of Rs. 2 Lakhs for books on any income head, the interest (surplus) that cannot be compensated can only be transferred during eight years of evaluation. In addition, this compensation is only possible against “income from home ownership.” The cost becomes sunk if you do not rent your home for rent.
Picture Source : Luxury Homes