Home Buyers have the opportunity to avail tax benefits and can take a loan under two circumstances; one for the purchase of a property and second for the renovation of the house. But a home loan has multiple tax benefits for a homebuyer. Let’s have a look at some of the tax benefits, property buyers get once they decide to buy their dream home.
- Support of the government – The government fully supports and encourages people to invest in homes as they then get viable tax deductions on the principal as well as interest paid on home loans. Under section 80C of Income Tax of India 1971 Act, a person is eligible to claim a deduction of up to Rs 1.5 Lacs. Also, the deductions are doable only after the construction of the house is completed. A homebuyer can’t claim income tax deductions while the property is being constructed.
- Tax benefits for second house – Under section 24B of Income Tax Act, to buy a second house, a homebuyer is eligible to claim a deduction for the entire amount of housing loan interest.
- Prepayment charges not applicable – There are no prepayment penalties on floating rate home loans. So a homebuyer, who has surplus money, can use it to make some payment towards a home loan and lower his burden.
- Easily buy your dream home – Buying a home has now become easy, with the availability of home loan that can be smoothly repaid in stress-free monthly installments.
- Long repayment duration – Amongst a variety of loans, a home loan has the lengthiest repayment tenure of up to 30 years, hence it proves to be less burdening for a homebuyer.
- Relish appreciation for the property – Over the years, rise in property prices can definitely work in favor of a homebuyer.