Real estate is known to be the top most choice for investment or residential purposes. However, if you are planning to purchase a property then don’t do it before going through this post. Indian government has released some of the Tax benefits for women buying property which encourages them to buy properties. These are some of the advantages which makes home ownership more accessible but also offers significant tax savings. So, if you are a woman who is planning to buy a property then this post can help you make informed decision. We are going to explore several benefits offered by the Indian government to women property buyers.
Tax benefits for women buying property
When you are a woman or man who is going to purchase a property and it can be flats, plots or even houses as well. Now, this can be for any purposes such as investment, commercial uses or residential uses. Here are some of the benefits that you get when you get a property a women’s name.
1. Lower stamp duty rates
One of the major benefits of owning a property under women’s name is lower stamp duty rates. Stamp duty in simple terms, is a tax paid to state government when you register a property under your name. However, the stamp duty rates can be varied on the basis of state to state. But women can avail lower rates compared to men. Example- Delhi have a stamp duty rate for women is 4% and this rate is 6% for men.
2. Tax deductions on home loan interest
The other Buying property in wife’s name benefits is you can claim the tax deductions on the interest paid. According to the Section 24 of Income Tax Act, women have the authority to claim the deduction of upto Rs.2 Lakhs per year on the interest paid on their home loan. This deduction is also available for self-occupied properties. Example- if you are paying Rs.2.5 lakhs as interest on your home loan in a financial year then you can claim a deduction of Rs.2 lakhs from your taxable income. This also helps to reduce your overall tax liability.
3. Tax deductions on principal repayment
Women also have the authority to claim tax on the principal repayment of their home loan. Under Section 80C of the Income Tax Act, you have the power to claim a deduction of up to Rs.1.5 lakhs per year on the principal repayment. Example- if you repay Rs.1.8 lakhs of principal amount in a financial year then you have the power to claim a deduction of Rs.1.5 lakhs from your taxable income. This process then reduces the tax liability.
4. Additional benefits for first time homebuyers
The other Government benefits for women buying property, when you are a first-time home buyer then you are eligible to claim the additional tax benefits under Section 80EEA of the Income Tax Act. Women have the option to claim an extra deduction of Rs.1.5 lakhs on the interest paid on their home loan. To avail this benefit, your property value must be under Rs.45 lakhs. Apart from that the loan must be sanctioned between April 1, 2019 and March 31, 2022. Example- if you are paying Rs.3 lakhs as interest on your home loan in a financial year then you can easily claim a total deduction of Rs.3.5 lakhs from your taxable income.
5. Joint home loans
The next up Home loan benefits for women buyers is when you take a home loan with your spouse then it can elevate your tax benefits. Both of you can claim individual deductions on the home loan interest and principal payments. This will effectively double the tax benefits. Example- if you and your spouse each pays Rs. 2lakh as interest on joint home loan in a financial year, then you both can claim the individual deduction of Rs. 2 Lakhs under Section 2. This is going to result in a total deduction of Rs. 4 lakhs from your taxable income.
6. Benefits of property ownership
The next up Government benefits for women buying property is financial and social benefits. This offers a sense of security, financial stability and independence as well. Not only this, but it can also enhance your creditworthiness. This makes easier for you to get a secure loan in the future.
7. Government schemes and subsidies
Indian government has launched different schemes and subsidies which promotes home ownership among women. One of the schemes is Pradhan Mantri Awas Yojna (PMAY). This scheme is designed to offer interest subsidies on home loan to eligible women. Under this scheme, women belonging to economically weaker section and low-income groups can claim the interest subsidy up to 6.5% on their home loans.
There are many of the Tax benefits for women buying property including financial advantages. Once you understand these tax benefits and utilize them, they can help you to come to an informed decision to achieve your dreams of owning a property.
