Things to note before you buy a home
What are you looking for in a home?
Must it be a bungalow,
a condominium, an apartment or a penthouse? The actual
area and size will depend on the size of your family as
well as your own personal requirements. Think long term.
Maybe you and your spouse require just a one-bedroom apartment
at this point in time but plan to have two children later.
In that case, a two-bedroom or even a three-bedroom is
a better option.
Why do you need one?
Are you purchasing it to reside in it? Or do you view
property as an investment and you are looking at capital
appreciation. If you are buying to reside in it, you may
consider a 3-bedroom apartment. But, if you are planning
to rent it out, even if you can afford a 3-bedroom apartment,
you may want to settle for a 2-bedroom because the chances
of giving it out would be easier. Also, if you are looking
at capital appreciation, you should consider making the
purchase in the suburbs, where the price appreciation
will be higher than in the case of prime property.
Where is it going to be?
Have you decided in which city or state you want to buy
your home? Are you looking at a place where you can eventually
retire? Are you considering your home town or a rural
or semi-rural set-up? In that case, do you want to buy
land instead and construct your own home? If you are purchasing
a home in a rural set up or in an area where you are not
currently residing, you may have to give a Power of Attorney
to someone you trust to handle all the property matters.
If it is a resale, have you taken a good look
at the inside?
Are you happy with the size of the rooms? Would your furniture
fit into this house? Does this home receive adequate sunlight?
Would you prefer your entrance facing a particular direction?
Are you happy with the flooring, wiring and the tiling?
Is the paint peeling? Has the plaster cracked? Are you
happy with the plumbing? Is there any evidence of termites?
Does it have adequate number of bathrooms and toilets?
If you had to do work in the house, get an estimate of
how much that is going to cost you.
Have you taken other factors into account?
If it is an apartment, you will have to check out the
building too. Is parking available? Is it open or covered?
Is there any security provided by the society? Is security
provided round the clock? Do you know anything about your
neighbours? Is the building well maintained? Does it have
a garden? Are you on the lookout for a housing complex
that also has a pool and a gymnasium? Is the monthly maintenance
affordable? What about water supply? Is it 24 hours? Are
there many power cuts in the neighbourhood? What is the
distance from your home to the market? Are you comfortable
with it? Are you children's schools nearby? What about
a hospital or nursing home? What is the distance from
the main road? Would you prefer it as far away from the
main road as possible. Is public transport easily available?
Is there a club nearby? Is there a bank branch in the
vicinity or at least an automated teller machine (ATM)?
Are you happy with the greenery? How far away is it from
your workplace?
You can save significant part of your tax liability if
you have taken a home loan. Here's how it works:
Interest paid on the home loan
As per Sec 24(b) of the Income Tax Act, 1961 a deduction
up to Rs. 150,000 towards the total interest payable on
the home loan towards purchase / construction of house
property can be claimed while computing the income from
house property. (The deduction stands reduced to Rs 30,000
in case of loans taken prior to March 1, 1999). The interest
payable for the pre-acquisition or pre-construction period
would be deductible in five equal annual installments
commencing from the year in which the house has been acquired
or constructed.
Please remember that in case of self occupied property,
this deduction is allowed only for one such self - occupied
property. The interest towards home loan taken for purchase,
construction, repairs, renewal or reconstruction of house
property is eligible for deduction under section 24(b).
Principal repayment of the home loan
As per the newly introduced Sections 80C read with section
80CCE of the Income Tax Act, 1961 the principal repayment
up to Rs. 100,000 on your home loan will be allowed as
a deduction from the gross total income subject to fulfillment
of prescribed conditions. Let us consider a hypothetical
example.
Your taxable Income: Rs 5,50,000
Principal repayment for the same year: Rs 1,10,000 and
Interest payable for the year : Rs 1,60,000
Total Deductions allowed: Rs 2,50,000 (Rs 1,50,000 towards
interest payable & Rs 1,00,000 for principal repayment
of the loan)
Thus, your taxable income will reduce to Rs 3,00,000 (
Rs 5,50,000 - Rs 2,50,000 ).
Disclaimer:
The taxation implications given above are summarized in
brief for the general understanding and reference. The
tax material is not exhaustive and not intended to be
advice on any particular matter. The clients should verify
all the facts, law and contents with the text of the prevailing
statutes and seek appropriate professional advice before
acting on the basis of any information contained herein
as the taxation implications may vary depending upon the
facts in each case and the tax laws are subject to change
from time to time and GT Housing Private Ltd is absolved
of any liability to any person, in respect of anything
done or omitted to be done by any customer by placing
reliance upon the contents of this material.
Buyer Guide- Courtesy ICICI Home Loans
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