How to save on taxes when buying a property in India

While buying a property in India can be pretty heavy on the pockets, there are various ways one can get tax deductions and save on this money.

Here are some of the genius ways to save taxes while buying property in any city of India:

Get Tax Relief Under Affordable Housing Scheme

In a bid to fulfill the Housing For All By 2022, the government has offered various tax benefits for those buying property in the affordable housing scheme.

There are various credit-linked subsidy schemes for those property buyers who belong to the Economically Weaker Section, Lower Income Group, Middle Income Group-I and Middle Income Group-II. 

One can buy a house in the affordable housing scheme or the Pradhan Mantri Awas Yojana and can get a tax deduction on GST and pay 8% GST instead of the 12%. In fact, the government is also urging the property developers and builders to waive off any tax levied on the home buyers in this segment.

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Get Tax Deductions On Registration Charges And Stamp Duty

A property buyer usually is asked to pay stamp duty and registration charge of 5-7% of the property price. However, Section 80C of the Income Tax Act, 1961 allows the property buyers to claim a tax deduction on these charges. 

If the buyers are fulfilling the conditions mentioned in the Section, they can enjoy a tax deduction of Rs 1.5 lakhs. Get Tax Deduction On Interest: For those who are taking home loans to purchase the property, there are various ways one can save on taxes, and saving on interest is one of them. 

Property buyers, who are buying a property for self-use and not investment purpose, can get a tax deduction of up to Rs 2 lakhs Under Section 24 of the Income Tax Act.

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Get Tax Deduction By Getting Joint Home Loans

Another great way to enjoy tax deduction on the purchase of a new home is by taking a joint home loan. In a joint home loan, each of the loan holders is entitled to raise tax deduction of up to Rs 2 lakhs on the home loan interest and a deduction of up to Rs 1.5 lakhs on the principal amount. One can get more information on these tax deductions under Section 80C of the Income Tax Act.

Get Tax Deduction On Principal Repayment

As per the Section 80C of the Income Tax Act, a property buyer can easily claim a tax deduction of up to Rs 1.5 lakhs in case one plans to pay a portion of the principal amount of the EMI. 

However, this deduction is only valid if the home buyer keeps possession of the property for at least a period of 5 years. Selling it off before that would add the same amount in the taxable income in the year the property is sold.

These are some of the taxes that one has to pay while buying a house in India and the ways one can save these taxes. Whether one is looking for plots for sale in Chennai or homes in Guduvanchery or in any other part of the country, these tax benefits can help in lowering the overall cost of the property and make it easier for purchase.