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Benefits You Can Get When Buying a House for the First Time

Benefits You Can Get When Buying a House for the First Time

Buying a home is a pivotal decision in an individual’s life and something that most of us dream of. First-time homebuyers can avail of several benefits, and listed below are some of these:

Extra Deductions – Under section 80 EE of the Income Tax Act, 1961, first-time homebuyers can avail of an exemption of Rs. 50,000. This is applicable if the property is bought through a home loan that has been sanctioned during a financial year. A deduction on interest on the gross income can also be availed of. Additionally, an additional deduction can be availed for interest on the loan for a self-occupied residence. There is a maximum credit of Rs. 50,000 for first-time homebuyers. The value should not exceed Rs. 50 lakhs with the loan amount should not be more than Rs. 35 lakhs.

Increased Deduction Claim Time – Up to Rs. 2 lakh is deductible from the gross total income when computing income from a self-occupied property. This is applicable only for constructions completed 5 years from the end of the financial year of availing the loan.

Tax Benefits in the Absence of HRA – It is possible for first-time homebuyers to avail of tax benefits under 80 GG of the Income Tax Act, 1961. This gives a deduction for expenses incurred in addition to 10% of the total income for house rent payments. This can be claimed for furnished and unfurnished homes where house rent allowance is not paid by the employer. This amount should not exceed Rs. 2000 monthly or 25% of the total annual income, whichever is the lesser value.

Pradhan Mantri Awas Yojana – Implemented in 2015, this scheme personifies the government’s mission of housing for all. The scheme gives a subsidy to first-time home buyers from lower and middle-income groups. The subsidy varies depending upon the principal amount.

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