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Tax Saving Opportunities for First-time Homebuyers

26 June, 2024
tax saving guide by Gems City Joka

Purchasing your first home is a significant milestone, and it comes with numerous benefits, including substantial tax savings. If you’re considering buying your first flat in Gems City, Joka, understanding the various tax-saving opportunities and eligibility criteria can help you maximize your savings.

Here’s a comprehensive guide to help you make the most of the tax benefits available for first-time homebuyers in India:

1. Section 80C: Principal Repayment

Under Section 80C of the Income Tax Act, you can claim a deduction of up to ₹1.5 lakh per financial year on the repayment of the principal amount of your home loan. This deduction includes payments made towards the cost of purchase or construction of a new residential property.

  • • Eligibility: Only individual taxpayers and Hindu Undivided Families (HUFs) can claim this benefit.
  • • Condition: The property must NOT be sold within five years of possession. If sold earlier, the deductions claimed will be added back to your income in the year of sale.

2. Section 24(b): Interest on Home Loan

Section 24(b) allows you to claim a deduction on the interest paid on your home loan. For a self-occupied property, the maximum deduction limit is ₹2 lakh per annum. For a rented-out property, there is no upper limit on the interest deduction, but the total loss from house property that you can set off against other income heads (like salary) in a financial year is capped at ₹2 lakh.

  • • Eligibility: The loan must be for the purchase, construction, repair, renewal, or reconstruction of the property.
  • • Condition: The construction of the property must be completed within five years from the end of the financial year in which the loan was taken.

3. Section 80EE: Additional Deduction for First-Time Homebuyers

First-time homebuyers can avail an additional deduction under Section 80EE of up to ₹50,000 per financial year. This deduction is over and above the deductions under Section 24(b) and Section 80C.

  • • Eligibility:
    • o The value of the residential property should not exceed ₹50 lakh.
    • o The loan amount should not exceed ₹35 lakh.
    • o The loan must be sanctioned by a financial institution or a housing finance company.
    • o The individual should not own any residential property on the date of sanction of the loan.

4. Section 80EEA: Additional Deduction for Affordable Housing

Section 80EEA provides an additional deduction of ₹1.5 lakh on the interest paid on home loans for affordable housing, over and above the deduction available under Section 24(b).

  • • Eligibility:
    • o The stamp duty value of the property should not exceed ₹45 lakh.
    • o The property should be new, not a resale or pre-owned property.
    • o The loan must be sanctioned between April 1, 2019, and March 31, 2022.
    • o The individual should not own any other residential property on the date of loan sanction.

5. Stamp Duty and Registration Charges

You can claim a deduction for stamp duty and registration charges under Section 80C, up to the overall limit of ₹1.5 lakh in the year these expenses are incurred.

  • • Eligibility: Only individual taxpayers and HUFs can claim this deduction.
  • • Condition: This deduction can only be claimed in the year these expenses are actually paid.

Smart Tax Benefits

Buying your first flat in Gems City, Joka, not only offers a premium lifestyle with modern amenities but also provides an excellent opportunity to maximize your tax savings. By understanding and utilizing these tax benefits effectively, you can significantly reduce your tax liability and make your first-time homebuyer journey more financially rewarding.

Discover Your New Home

Are you ready to embark on your home-ownership journey? Learn more about premium and affordable residential options available at Gems City, Joka, by visiting our website or contacting our sales team today. Don’t miss out on the chance to experience the joy of beautiful living while enjoying substantial tax savings!

By leveraging these smart tax saving strategies, you can make your dream of becoming a first-time homebuyer in Gems City, Joka, not only a reality but also a financially savvy decision.

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