Investing in real estate is the most common investment for we Indians. Investment is now a days considered a better option than savings as with investment your money grows with time without any extra effort. With the rising price of properties investing in real estate is best and people purchase multiple houses for investment purpose. There are many misconceptions like we can’t take more than one home loan at a time. But this is a myth actually. One can have multiple house through multiple home loans. In fact there are certain tax benefits too even in case of multiple home loans.
Why to Invest in Residential Properties?
Basically, security and high returns these are the two important benefits that real estate investments provides to a person and these are also the major reasons for buying a residential property. Also income tax benefits and additional lure towards buying a residential property makes it easier.
The housing loan principal amount up to a limit of INR 150,000 is exempted from the Income Tax (under the section 80C) and similarly the interest paid on housing loan up to INR 200,000 (under the section 24b) is also exempted from Income Tax slab.
Buying multiple properties and leaving them out for rent brings in additional income and certain income tax rebates too. These benefits this part is juicy and attract most us towards real estate investment.
Tax Benefit on Repayment of Principal Amount
As per the Section 80C, one can claim up to INR 1.5 lakhs for the repayment of any housing loan, this includes cost of registration and stamp duty of a residential house too. Although there is no restriction on having multiple home and multiple home loans but the amount of deduction is strictly restricted to INR 1.5 lakhs. The overall amount of exemption under section 80c includes other items like provident fund contribution, PPF contribution, life insurance premium, tuition fees, NSC, ELSS.
The deduction in the income tax can be claimed by anyone only after they are having the possession of the property. You can claim for the deduction once you start paying your EMIs towards your home loan. One can never avail any tax benefits if borrowed from family and friends even in the case of property purchase.
Tax Benefit on Interest Payment
One can claim for the deduction on interest payable regarding a home loan which can be taken for purchase, construction, repair, or renovation of any property. This exemption is possible under the Section 24b. In case if you own only one residential house which is self-occupied then the maximum deduction that you can claim on interest repayment of a loan for that property, is up to INR 2 lakhs per annum.
However, on the off chance that if the cash is obtained after first April 1999 and development of the property isn’t finished inside a specific time of five years from the finish of the budgetary year in which the cash was acquired, the derivation in regard of the premium claim should be limited to INR 30,000 as it were.
So What Would It be a Good Idea for You to Do?
In a perfect world, you ought to put resources into only one private property. Nonetheless, on the off chance that it is hard to abrogate your childhood and the resultant attitude, guarantee that the lawful responsibility for private properties is disseminated among your relatives so you can use the tax reductions to the most extreme degree conceivable.
On the off chance that you should hold different private properties, at that point guarantee that you let them out for lease and utilize this pay for making different types of ventures. Along these lines your speculation portfolio will get enhanced.
The other land venture alternative accessible is to claim just a single private property while putting resources into various business properties since business properties appreciate a large group of tax cuts.
See all the expense and land laws before putting resources into different private properties. It generally is smarter to fail in favour of alert
In the event that you have let out any property or properties possessed by you, you can guarantee conclusion for the whole intrigue paid, with no upper roof against the lease got in regard of each such property. However, in the case that you possess in more than one (house) property and in excess of one houses are involved by you, at that point, you need to pick any one property as self-possessed and the other property/properties are dealt with as let-out for which a notional rental wage, in view of the lease the property is relied upon to get, is required to be offered for tax assessment. Along these lines, once any such property is dealt with as let-out, you can guarantee the tax cuts for full premium paid, for cash obtained in regard of any of the property that is dealt with as let-out.