Buying a home is a big financial step, but it also comes with several tax advantages that can ease the burden. If you’re planning to buy a flat in Kolkata, it’s worth understanding how these benefits work so you can make the most of them.
Deduction on Home Loan Interest (Section 24)
If you have taken a home loan, the interest you pay on it can be claimed as a deduction under Section 24 of the Income Tax Act. You can claim up to ₹2 lakh per year on a self-occupied property. For a rented property, there’s no upper cap on the deduction, but the overall loss that can be set off against income is limited to ₹2 lakh.
Deduction on Principal Repayment (Section 80C)
The principal portion of your home loan EMI is eligible for deduction under Section 80C, up to ₹1.5 lakh per year. This is the same section that covers investments like PPF, ELSS, and life insurance premiums. Keep in mind that to claim this benefit, the property should not be sold within five years of possession.
Stamp Duty and Registration Charges
You can also claim deductions on stamp duty and registration charges under Section 80C, subject to the overall limit of ₹1.5 lakh. This is a one-time benefit, available only in the year you actually incur these expenses.
First-Time Homebuyer Benefits (Section 80EE & 80EEA)
If you are a first-time homebuyer, you may be eligible for additional tax deductions:
- Section 80EE: Up to ₹50,000 on home loan interest, if the loan is sanctioned before a specified date and the loan amount doesn’t exceed ₹35 lakh.
- Section 80EEA: Up to ₹1.5 lakh on interest for affordable housing loans, provided the property value and loan meet certain conditions.
Benefits for Joint Owners
If you buy the flat jointly with a spouse or family member, both co-owners can claim deductions separately. This means the overall tax benefits can double, provided both are co-borrowers and co-owners.
Why This Matters for Buyers in Kolkata
Kolkata offers a wide range of housing options, from affordable flats to premium bungalows. For many buyers, tax savings play an important role in managing monthly outflow. By structuring your purchase and loan smartly, you can reduce your tax liability while building an asset for the future.
Buying a home is more than just a lifestyle choice it’s a long-term investment. Knowing the tax benefits can help you plan better and save significantly over time. If you’re looking at flats in Kolkata, factor in these deductions while calculating your budget. A good financial plan can make your home-buying journey smoother and more rewarding.