Home purchasing is one of the most significant financial events in anyone’s life. For most home buyers in Bangalore, their dream of owning a home could also bring tax benefits. Whether you invest in budget properties in Bangalore or luxury homes, the Indian Income Tax Act provides a few deductions that can help reduce your financial burden and make being a homeowner more rewarding.
Home Loan Principal – Section 80C
- Deduction for home loan principal
As per Section 80C of the Income Tax Act, you can get a deduction of up to ₹1.5 lakh on your repayment of a home loan per annum. It is the same for apartments, villas, and independent houses in Bangalore. If you purchase luxury apartments in Bangalore, the amounts are generally higher, so you can make the best of it under this section.
- Home Loan Interest Deduction – Section 24(b)
Yet another significant advantage flows from the interest in your home loan. Under Section 24(b), you can claim up to ₹2 lakh per year for the interest component if the property is self-occupied. There is no limit on interest deduction for a rented or let-out property in Bangalore, which is particularly appealing to luxury home investors who may rent their properties to high-end tenants.
- Tax Saver on Stamp Duty and Registration Charges
Stamp duty and registration fees also increase the cost of a property when you buy. These expenses are also deductible under Section 80C (under the ₹1.5 lakh umbrella). So, whether you register for an affordable one-bedroom or a luxury flat in Bangalore, you can save some taxes when buying it.
- Joint Home Loan Benefits
Suppose the husband, wife, or family members buy a property by joint names, they can separately claim deductions on the principal (under Section 80C) and interest (under Section 24(b)) paid for such a home. It doubles the tax-saving opportunity, making investing in high-value luxury property in Bangalore more affordable.
- Benefits for First-Time Home Buyer – Section 80EEA
Under Section 80EEA (subject to certain conditions), first-time home buyers can deduct up to ₹1.5 lakh on home loan interest. It typically aims at affordable housing but significantly induces new homeowners to buy smaller properties in Bangalore.
- Rental Income Deductions
If your property is for rent, you can deduct 30% of the rental income as maintenance under Section 24(a). That makes it more beneficial to own luxury properties in Bangalore, which give a better rental yield and offer tax-efficient incentives.
Final Thoughts
Real estate market is booming, with options from budget apartments to premium projects. Investing in properties in Bangalore is a wise decision because of the tax advantages, as per the provisions of the Income Tax Act. If you are purchasing an investment property, discuss with a tax advisor how to maximize these write-offs and make your property purchase more profitable!
