Investing in real estate in Pune offers not only a valuable asset but also a range of tax benefits. With the thriving real estate market in Pune, homebuyers have an opportunity to capitalize on the tax advantages associated with purchasing a 2 BHK flat. In this blog, we will explore the various tax benefits that come with investing in a 2 BHK flat in Pune, including deductions on home loan interest and principal repayment, capital gains tax exemption, tax advantages on joint home loans, and deductions on rental income. These tax benefits make buying a 2 BHK flat in Pune a financially-wise decision. Let’s explore the options.
5 TAX BENEFITS TO AVAIL WHEN BUYING A 2 BHK FLAT
1. Deduction on Home Loan Interest
One of the significant tax benefits of owning a 2 BHK flat is the deduction on home loan interest under Section 24(b) of the Income Tax Act. Homebuyers can claim a deduction of up to Rs. 2 lakh per year on the interest paid on the housing loan. This deduction is applicable for both self-occupied and rented properties. It significantly reduces the overall tax liability of the homeowners.
2. Deduction on Principal Repayment
Along with the deduction on home loan interest, homebuyers can also avail tax benefits on the principal repayment amount under Section 80C of the Income Tax Act. This section allows for a deduction of up to Rs. 1.5 lakh per year, which includes other eligible investments such as life insurance premiums, Employee Provident Fund (EPF), National Savings Certificates (NSC), and more. It helps homebuyers save on their tax liability while repaying the home loan.
3. Capital Gains Tax Exemption
If you decide to sell your 2 BHK flat in the future, you can avail capital gains tax exemption under Section 54 of the Income Tax Act, subject to certain conditions. If the capital gains from the sale of the property are reinvested in purchasing another residential property within two years or constructing a new property within three years, the entire capital gains amount is exempted from tax. This exemption helps in maximizing your returns on investment and reducing the tax consequences.
4. Tax Benefits on Joint Home Loans
Many homebuyers opt for a joint home loan with their spouse or family members to avail higher loan amounts. This also provides an additional tax advantage. Under separate sections of the Income Tax Act, each co-applicant can individually claim tax deductions on the principal repayment and interest payments. It helps in optimizing the tax benefits and reducing the overall tax liability for the family.
5. Rental Income Tax Benefits
If you choose to rent out your 2 BHK flat, the rental income received becomes taxable. However, you can claim deductions for various expenses related to the property. These expenses include property maintenance charges, municipal taxes, home loan interest paid against the rental income, and even the standard deduction of 30% of the annual rental income. These deductions significantly lower your taxable rental income, resulting in reduced tax liability.
Conclusion
Investing in a 2 BHK flat in Pune not only provides a comfortable living space but also offers substantial tax benefits. The deductions on home loan interest and principal repayment, capital gains tax exemption, tax advantages on joint home loans, and rental income tax benefits make it a financially rewarding investment. If you are considering buying a 2 BHK flat in Pune, explore the options provided by Audumbar Group, especially our Marigold Calendula project. Our residential venture offers luxurious 2 BHK flats in a prime location in Pune, complemented by a wide range of amenities for a modern and convenient lifestyle. To know more about Marigold Calendula, visit our website. Make an informed decision and take advantage of the tax benefits while investing in your dream home.
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