Property registration is the most important and the final stage of a home buying process or a property transfer. Once the property is registered in your name, it’s official: you own the house! However, learning about property registration should not be put off until the last minute. As a potential homeowner, being informed about the procedure will help you keep you when it is time.
A legal obligation that has to be tended to without fail, tax is the cornerstone of any country’s economy. It boosts the growth of the nation by contributing to the GDP (Gross Domestic Product), caters to the budgetary demands of the nation, and finances the maintenance of public projects, thereby raising the living standards of the citizens. These charges are so vital to the health of an economy; a change in tax policies will definitely reflect in the economy’s growth trajectory. If citizens are not responsible taxpayers, the government will be hindered in meeting the demands of various sectors in the country. While ensuring that the citizens carry out their tax obligations, the government also reduces their tax burden in several ways through tax benefits.
What is a tax benefit?
A tax benefit is an advantage given to you by the government to avail a reduction on your tax bill and thus reduce the tax burden. According to Income Tax Act 1960, certain payments and investments such as tuition fees of children, charitable donations, provident funds, education loans, medical expenses of disabled family members, and so on can help you claim your tax benefits. As far as homeowners are concerned, home loans are the biggest source of tax benefits as per sections 24, 80 C, and 80 EE, and 80 EEA under Income Tax Act.
How can tax benefits be claimed on a home loan?
A home loan not only helps you buy your dream house. While repaying the loan in the form of Equated Monthly Instalments, you can also claim tax benefits on the principal and interest paid. There are four sections under the Income Tax Act that help homeowners become eligible for tax deductions, which are section 24, section 80 C, section EE, and section 80 EEA.
The following tax benefits can be claimed under the Income Tax Act, 1961: