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 under section 80C is up to Rs.150000 in a financial year.
- In the Finance Act 2017 announced on 1st Feb 2017,the maximum tax deduction on interest paid on housing loan under Section 24 of a self-occupied property is Rs. 2 Lakhs (increased in Budget 2014 from 1.5 Lakh ( Budget 2014) to Rs. 2 Lakhs).
- The deduction allowed to first time home buyers under section 80EE earlier was limited to maximum Rs 1lakh in total and was available for only 2 financial years. However, this section has been reintroduced effective FY 2016-17 (assessment year 2017-18).Now the deduction is allowed up to Rs 50,000 per year starting from FY 2016-17 and subsequent years until the loan is repaid. For claiming this deduction loan must be taken from a financial institution for purchasing ther first residential house property value of which shall not be more than Rs.50 lakh and loan amount shall not exceed Rs.35 lakh.
- 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.
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