Buying a property is the biggest
purchase or investment that most people make in their lifetime and the
government realizes this. The government has allowed income tax deduction if
the property is purchased on loan. The borrower can claim deduction from 1.5
lakh to 2 lakh under the Income Tax Act on home loans. Entire interest can be deducted directly from
income if the property is not occupied by the borrower. These above conditions
apply even if the money is from friends, family or private sellers.
There is a problem with the current
market situation, as projects are delayed in completion. This in turn causes
problems for borrowers. If their house is not fully constructed then the
borrowers cannot deduct any interest. A buyer, on the other hand, receives the
benefit of the principal amount. Upon
possession, the borrower of the property can claim a deduction for the interest
paid during the pre-construction period. To take advantage of the current
scenario, a couple must take out a joint loan that allows each to claim a full
tax deduction for both principle and interest. This also applies to children
and parents.
If
the borrower has only one house and is self-occupied, there is no taxation in
this case, but if there are more houses and it is neither exempt nor occupied,
then taxation here can be a bit complicated. In such a case, the owner should get the
national rent value and pay tax on it. An appropriate method is followed to
calculate the national price, taking into account the value of the municipal
property and the Rent Control Act or the ongoing rental rates of the locality.
If a person is trying to claim a
housing loan deduction and Housing Rent Allowance (HRA) at the same time, it
causes trouble. Many claim HRAs because they have a home in a different city
and live in a different city. The department
allows you to claim an HRA in the same city with real reasons, such as if you
have a suburb in the city and your office in the city. When calculating the
national value of your second home, you can deduct some taxes like municipal
taxes and also 30 percent of the value for repairs and maintenance.
When it is time to sell the acquired property, the tax paid is calculated on the profit generated. If it is sold
within three years of acquisition, the seller is required to pay Short Turn
Capital Gains (STCG) and the time period is more than three years, they are
required to pay Long Turn Capital Gains (LTCG) requires surcharge which is more
than about 20 percent. If one buys a new
asset equal to the long-term capital gain within one year before the date of
sale, the entire tax outgo can be saved. This property is under construction.
The time period is three years. While calculating STCG and LTCG tax, one can
deduct money on corrections and also to acquire assets such as payment of stamp duty, legal fees and brokerage.
