Investing in property is a crucial decision as it makes the investor spend a fortune from one’s income and savings. If the owner of a property is liable to pay property tax, it also brings to them the opportunity to enjoy tax rebates.
With the commencement of new financial year and people looking for options to save taxes, it is a good idea to know how much tax you can save by investing in a property.
When it comes to property buying, a lot of questions started taking rounds in our mind. One such question is that what amount one should invest in the property to gain maximum tax benefits? Experts say that when you take a home loan to purchase a property, then you are liable to claim tax rebates on the interest of up to Rs 2.0 lakh. However, in the case when you own more than one property, which is not rented out, one needs to pay wealth tax at the rate of 1 per cent.
It is also important to understand how you can manage the long-term and short-term capital gain tax at the time of selling property. Experts tell us that Short-Term Capital Gains or STCG is applicable when a property is held for less than three years before it is sold off. On the other hand, Long-Term Capital Gains or LTCG is applicable when the property is sold off after three years.
What comes as good news for the buyers is the provision that if they buy property on the name of a female member, then they can enjoy several more tax benefits. They not only get concession in stamp duty that is paid at the time of registration of the property but also enjoy several tax exemptions. For instance, if the property is occupied by the woman buyer, then the deduction towards interest will be limited to Rs 2.0 lakh in a financial year. However, if the property is rented out, the amount of interest on the home loan can be claimed as deduction against the net rental value.
There are many more questions that our readers want to be answered, such as can two people get tax exemptions on the same property or what are the tax implications for the non-Indians buying property in India.