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Real estate involves tax-saving investments for earning passive income. From appreciation, mortgage pays down, recurring cash flow to tax deductions, its benefits are a lot. It is one of the most preferred investment options as real estate renders tax incentives on vacant lands, rental properties, industrial and commercial buildings, apartments, and shopping centers. It is an excellent mode of gaining diversified income and increasing the Return on Investment (ROI) over time. In the Indian Real Estate market, several investors invest in properties with Limited Partnership (LP) and Limited Liability Company (LLC), enhancing additional tax saving options for the businesses. Hence, this imperishable asset can produce income tax benefits for a real estate investor, including tax sheltering. Furthermore, an income tax benefit on home loan helps real estate investors to manage smooth cash flow and enjoy multiple tax benefits and exemptions.
Tax benefits from Real Estate Investment
Real estate has witnessed an upsurge in investment rates over the past few years. Lucrative home loan rates, reduction in stamp-duty, and multiple income tax benefits, makes it the best time for real estate investment. Besides, the Government subsidy of Rs. 2.67 lakhs on home loans makes real estate one of the most tax-saving investments.
The benefits of having a joint property
According to the Income Tax Act 1961, real estate investors can claim a tax deduction for the interest paid for a home loan under the ‘Income from house property’ category. In a financial year, investors can only claim tax deduction up to Rs.2 lakhs for a self-occupied residence. However, tax saving options increase if the property is jointly owned as both the owners can claim a deduction for interest up to Rs. 2 lakhs in every financial year.
Tax deductions under house property
Under Section 24 of the Income Tax Act enables investors to claim deductions of up to Rs. 2 lakhs per financial year on interest paid for home loans. But first, a return has been filed for the last financial year on their home loan and if the property owner makes this property their primary residence. Income tax benefit on home loan allows two types of deductions—Net annual value, a standard deduction, and the interest borrowed on the capital. Furthermore, if the property is on rent, the entire interest is renounced off as a deduction.
Reduction in the individual tax burden
Under Section 80C of Income Tax, an individual real estate investor can claim income tax benefits for repaying the principal amount of real estate. This enables an individual or HUFs to claim Rs. 1.5 lakhs from their total gross income for repayments and investments. So if you are willing to enjoy income tax benefits on home loans, Srivari Group has exquisite residential properties to invest in!
GST—a boon for investors
With the introduction of GST, there is no longer any individual service charges and VAT that investors need to pay. The Government levies GST on under-construction projects based on their prices. So, the under-construction residential properties under Rs. 45 lakhs have a GST of 1%, while the ones above this price range have 5% GST. With Luxury Villas in Coimbatore, Srivari Group has projects suiting your budget.
Wrap-Up
With myriad tax saving options, Real Estate indeed opens a new spectrum for the investors. Empowering the vision to transform the real estate industry, Srivari Group offers landmark commercial and residential projects, thus making a distinctive identity in the pool of real estate organizations. Two of its most notable upcoming projects, Srivari Saarang and Srivari Ekantam, will redefine the concept of luxury living. With a strategic location, state-of-art décor, modern amenities, Srivari Ekantam offers luxury villas in Coimbatore (3 & 4 BHK) to empower tax-saving investments. So, give your real estate investment a second thought and get in touch with Srivari Group!
