Housing finance availed by individuals for residential property from a bank or housing finance company has multiple benefits. There is a rate war going on in Housing Loan Segment. SBI is offering 8.9% per annum, IOB is offering 8.65% and Bank of Baroda has come out with 8.35% pa. If you have not yet invested in house property, it is the right time to invest.
The repayment principal amount of loan, up to the Rs.150000.00 in a financial year, enables you to get tax rebate up u/s 80 ( c ) of IT Act. following are the major benefits to the investment in-house property on bank finance.
- Stamp duty paid and registration fee paid on property purchased can also be included for tax rebate within the overall limit of Rs.150000 in a financial year.
- In addition to the above rebate, the interest portion paid on housing loan allows you a deduction up to Rs.150000.00 on taxable income separately under section 24.
- First time home buyers (the person who does not already own a house property in his name), who has availed a housing loan of Rs.25lakhs or below on or after 01.04.2013, can claim additional tax deduction of Rs.100000.00 (Rupees one lakh) on interest paid on that loan under section 80EEE subject to condition that the value of residential property should not exceed Rs.40 lakh (Rs.400000.00). If the interest paid is less than Rs.100000.00 (one lakh), in the first year, the unclaimed deduction can be utilized in the subsequent year.
- The appreciation value of house property is high in city/urban areas.
- If you think to buy a residential property purely on investment purpose, then it is a good idea to buy residential property in a city/urban area as appreciation on properties faster compared to rural/semi-urban areas and you may get good rent in the urban area if you are not occupying the same.
Click here to know ‘How-to-examine-title-deeds-of-house-property’