Tax Benefits of Real Estate Investment

Introduction

In India, one of the best ways to acquire money and financial independence is through real estate investment. It’s simpler to deduct a lot of expenses when you own property because it’s like running a small business. You may take advantage of a variety of tax breaks and perks when you buy a property with a loan, which not only helps you save money on taxes but also helps you manage your cash flow. Read on to know more about it.

1. Section 24

Under Section 24, you are able to request exclusions from the home loan interest you pay. This section is located under the heading “Deductions from Income from House Property,” Under this clause, deductions from an individual’s income from real estate are permitted. There are just two sorts of deductions that are allowed: interest on borrowed money and net annual value, which is the standard deduction. Section 24 prohibits any additional deductions.

2. Section 80C

Under this clause, you may claim tax benefits on the principal repayment. Investments made in the return of income may be written off. Income should only be reported for the year the investment was made. The most you can save on taxes is Rs. 1.5 lakh, but there is no set minimum limit.

3. Capital Gains

Capital gains are the profits that are realized by selling an investment, such as stocks, bonds, or real estate. It can be short-term or long-term. On your income taxes, you can deduct capital gains. According to the tax bracket, short-term capital is taxed as regular income and long-term capital is dependent on factors like your salary and marital status, etc.

4. Depreciation

The biggest tax break normally offered to real estate owners is depreciation expense, which can increase cash flow by lowering tax obligations. Over time, the real estate investment one has made begins to break down. Only a property that generates income based on wear and tear is allowed to be written off.

Conclusion

With the growing popularity of investment in real estate, it is important to know about the advantages it offers. Tax benefits on the property bought is one such aspect that the person who is about to invest should have knowledge of so that they can enjoy great profits and have remarkable gains.

About Us

Since 2007, Subham Group has been a renowned real estate company in Guwahati offering a wide selection of premium homes. We are wholeheartedly committed to developing premium homes of different sizes, allowing people to invest in their dream abode. We ensure the use of high-quality materials for the development so that the residents do not fall into any inconvenience or quick damage during their stay.

To learn more and find your ideal home, contact us.