Benefit on loan interest for first home buyer - effective from April 1st 2013
Rammohan G
Dear friends,
Indian finance minister presented the budget on Feb 28th. In this budget, there is tax benefit for first home buyers. Please find more details below.
In below mail, benefit of up to Rs 30000 is mentioned. The additional benefit is on the interest on loan. Those whose income falls within 30% tax bracket can get benefit of Rs 30000.
http://www.financialexpress.com/news/first-home-buyers-get-tax-sop-up-to-rs-30k/1081485/0
First home buyers get tax sop up to Rs 30K
Offering the biggest sop to the first-home buyer, Finance Minister P Chidambaram proposed a one-time benefit of up to Rs 30,000 by way of an additional deduction of Rs 1 lakh paid towards interest on a home loan besides the Rs 1.5 lakh deduction now available.
However, the finance minister has at the same time proposed a 1 per cent tax deducted at source (TDS) on high-value transactions of over Rs 50 lakh on immovable properties.
Aiming at boosting the affordable housing segment, Chidambaram introduced a new Section 80EE wherein home buyers will get a window of one year to avail of the new benefit.
To be eligible to claim the benefit, home buyers will have to buy their first home whose value must not exceed Rs 40 lakh, and the loan should be restricted to Rs 25 lakh. While the loan needs to be taken between April 1, 2013 and March 31, 2014, the buyer can claim the benefit of deduction of Rs 1 lakh over two years.
About 85 per cent of home loans availed in the country fall in this category.
In case the loan is taken in the middle of 2013-14, the buyer can claim the benefit in the assessment year beginning April 2014 and the remaining amount can be claimed in the next assessment year.
Under the TDS of 1 per cent on immovable property transactions of over Rs 50 lakh, if an individual sells his house for Rs 50 lakh, he will have to pay a TDS of Rs 50,000. The reasoning behind this is the government feels immovable property transactions are usually undervalued and under-reported and half of the transactions do not have PAN details of the parties involved.
“With a view to improve the reporting of such transactions and the taxation of capital gains, I propose to apply TDS at the rate of 1 percent on the value of the transfer of immovable property where the consideration exceeds Rs 50 lakh,” Chidambaram said.
Thanks and Regards,
Ram
Our motto should be, "I seek not to be understood, but to understand."
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