The best kind of investment that any individual makes would be buying a home. In order to realise this dream, all of us keenly save up money and start planning from days before we purchase a home. For people who seek to avail a home loan for this purpose, there are ample options of schemes extended by banks and non-financial institutions these days. Relying on a Home Loan also promises certain tax benefits to the individuals.
Some of the tax benefits that you can look forward to as a first-time home buyer
- Interest and principal components of a home loan can get you tax benefits. The principal amount can be claimed for tax exemption under section 80 (c) and the interest amount can be claimed under section 24 (b). As an individual, if you are seeking for a home loan for construction purposes or for purchasing a flat, you can benefit from these tax exemption benefits.
- At any given point of time, flats for sale in Kochi are plenty and as an individual, if you decide to sell the house or flat that you had purchased within a year’s time, or before a period of 3 years, you will be bound to pay a short-term capital gains tax. If you are a first-time home buyer, again, on this you can benefit from having a tax exemption, if the profit amount is invested in capital gains tax-saving bonds as per Sec. 54.
- If a home loan is taken on or after 1st of April 1999, you are likely to have a deduction on interest component on home loan for up to Rs.1.5 lakhs. Provided that the purchase or construction of the house or flat is completed within three years from the end of the financial year during which the loan was procured. If so, a home loan tax benefit can be availed. In addition to this, a certificate from the lending bank has to be provided that states that the interest is applicable on the home loan taken for the purchase or construction of a house.
- An uninterrupted payment on EMIs or interest rates is only subject to gain you from tax benefits. Any failure in paying the EMIs or interest amount can naturally lead to a situation where you wouldn’t be able to claim the tax benefits.
- Tax benefits on a particular home loan can be benefited only by the person who has taken it. Any co-borrower in this case will have only minimal benefits of the deductions. And that is limited to the amount that they will repay.
As you might be looking forward to choosing a best and suitable home after going through the plentiful ads on Flats for Sale in Kochi, do also consider the points mentioned here that could benefit you from seeking a home loan. Apart from tax benefits, relying on a home loan for purchasing a home has other advantages as well. Especially with the current scenario, there are a lot of benefits extended to a home loan seeker by the lending institutions.