Check your property loan benefits
Refunds will be considered income if the property is sold within five years.
While buying a house, one is often that the tax benefits will be available in two sections – Section 80C (up to Rs 1 lakh) to pay principal and section 24 (up to 1.5 lakh rupees) for the payment of interests.
Under section 80C, there is an additional benefit. One could also claim the amount paid as stamp duty and registration of property in the year of purchase. However, if you do, there are several conditions attached.
Sale of property: Most people only take into account capital gains will have to pay when selling your property. However, the deductions claimed on the principal amount under section 80C can not sell the home for the next five years. If sold, the total amount of savings through such discounts will be considered as an income in the year of sale and taxed accordingly. The relief under Section 24 is not related to the sale of goods. You do not have to pay for the benefits from it.
Under construction property: The purchase of a property under construction by a property loan is a common practice. However, unless you have possession and until the certificate of ownership that arises is, no refund can be requested in any section. The total interest paid until possession can be claimed in five equal installments over the next five years after the end of the year when he received possession.
Second property: If you own two properties and took out loans for both the benefits under Section 80C will remain the same. Therefore, you club claims of both properties. However, section 24, in addition to the usual discounts of 1.5 lakh rupees for the first self-occupied property, we can say the total amount of interest the second house as a deduction. Best of all – there is no limit to the benefit of interest payments in case of a second home.
Loans from other sources: The claims on the principal amount under section 80C can be done, the home loans must be from a bank or an institution. If one has borrowed from friends or relatives, there will be benefits.
However, Section 24 permitted to claim a rebate of 1.5 lakh rupees, even borrowing from friends and family, as long as the property is self-occupation. “However, the taxpayer must maintain a certificate of a friend or family member who is paying the interest. Not being able to justify the source of funds for the purchase could see him receive a letter from the scrutiny of the IT authorities, “said Homi Mistry, a partner at Deloitte Haskins & Sells.
Loan renewal: No discounts for a loan taken to repair or renewal of self-occupied properties in section 80C. There is a limited benefit of Rs 30,000 under Section 24.
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