Purchase A Home And Save Tax

"Taxes" Article
Article Directory Home

All Categories

Finance

Taxes

Purchase A Home And Save Tax By Expert Author: Addi Vardhaman \| Article Abstract
Word Count: 404 words \| Views: 73 view(s)

The current union Budget has extended the same tax benefits for one more year. Now, Indians can save significant part of their tax liability if they have taken a home loan. The savings on tax payment as a result of the new budget declaration are significant.

Here's how the tax reduction works:

Interest paid on the home loan or housing finance

As per Sec 24(b) of the Income Tax Act of India, 1961 a deduction up to Rs. 150,000 towards the total payable interest on the home loan towards purchase / construction of house property can be claimed while computing the income from residential property. (The deduction stands reduced to Rs 30,000 in case of loans taken prior to March 1 of the year 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 purchased, acquired or constructed.

The taxpayers should remember that in case of self occupied property, this tax 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 also eligible for deduction under section 24(b).

Principal repayment of the home loan

As per the newly introduced Sections 80C with section 80CCE of the Income Tax Act of India, 1961 the principal repayment up to Rs. 100,000 on the home loan will be allowed as a deduction from the gross total income of the tax payer subject to fulfillment of prescribed conditions. Let us consider a hypothetical illustration.

Net taxable Income: Rs 5,50,000

Principal repayment on home loan for the same year: Rs 1,10,000 and Interest payable for the same year : Rs 1,60,000

Maximum Deductions allowed: Rs 2,50,000 (Rs 1,50,000 towards interest payable and Rs 1,00,000 for principal repayment of the loan amount)

Thus, total taxable income of the taxpayer will reduce to Rs 3,00,000 ( Rs 5,50,000 - Rs 2,50,000 ).

Tax payers in India can use the Tax Savings Tool (on the left) to ascertain the proper tenure of the loan they must take to minimise their post tax cost of the home loan. If the person has already taken a loan, it could be useful to refinance the same today at a lower interest rate and a higher tenure using the Refinance Tool of housing finance. So, happy days are now for the prospective buyers and taxpayers who have already purchased a home through loan.

About the Author/Author Bio

For more tips on finance community for you and your family. Addi Vardhaman works as a business writer for Paisawaisa. To find housing loans, best personal loans rate in India, www.paisawaisa.com

Article Source: http://www.articlesphere.com/Article/Purchase-A-Home-And-Save-Tax/138883

Article Tags: finance, loans, real estate, investment, credit card, banking, financial services, finance community

Article Submitted: 2008-05-09 | This Article has been viewed 73 times.

Rate Article

More "Taxes" Related Articles

Listed below are more articles related to the above article from the "Taxes" article category.

People interested in the above article "Purchase A Home And Save Tax" are also interested in the related articles listed below:

Go Zone Tax Benefits for Real Estate investors

In 2005, the U.S. Congress delivered the "Gulf Opportunity Zone Act" which offers incredible tax benefits to real estate investors as part of an effort to help revitalize regions affected by hurricanes Katrina, Wilma, and Rita. With the clock ticking on the government tax incentives, and the rapid growth being seen throughout the region, the Go Zone is realizing a "gold-rush" of investment buyers, scouring for bottom market prices and to recoup significant tax dollars they paid out to Uncle Sam over the past 5 years.

Short-Sided and Morally Corrupt Tax Policy

Here is a perfect example of selfish behavior and talking out of both sides of one's mouth. This California politician uses the sane argument to defend his position to enhance his own district yet he practices insanity when it comes to the overall good of California.

Work Opportunity Tax Credits: What Are They And How Can They Help California Businesses

As offered by the state of California, work opportunity tax credits are hiring tax credits. In order to encourage businesses in enterprise zones to hire individuals that often are at a disadvantage when looking for work, an enterprise zone hiring tax credit of up to $13,000 per qualifying employee may be available to your business.

How To Qualify For Green Tax Incentives

If you own a business in California, and as part of the cost of doing business you install energy efficient technology such as photovoltaic systems and solar heaters for water tanks, wind generators or geothermal heat pumps, you may be eligible for California energy credits on your taxes.

Year-End Tax Planning

Well, the year is coming to an end and many business owners are meeting with their accountants and tax advisors to figure out how to reduce that inevitable income tax burden coming in April. Here are a few strategic ways to keep some more of that money at home.

Accountancy - Taxation

Taxations first known systems were around 2800 BC - 3000 BC in Ancient Egypt (The first dynasty of the old kingdom). It is recorded in the time documents that Pharaoh would take a biennial tour of his kingdom; on his tour of the kingdom he would collect tax revenues from the people of the kingdom. Granary receipts on papyrus and limestone flakes are other records that were found.

Moving From The UK To The Republic Of Ireland: The Tax Consequences

The article describes the Irish tax rules for determining the residence and ordinary residence status of individuals and explains how the Irish Income Tax, Capital Gains Tax and Gift/Estate Tax (Capital Acquisitions Tax) systems apply to individuals who relocate to Ireland. This is followed by a discussion of the significant tax savings which may be gained by individuals who move from the UK to Ireland.

Print Article

Favorite Article

Email to Friend

Republish Article

Article Directory Home

All Categories

Finance

Taxes

Can't find what you're looking for? Try Google Search!

(We serve worldwide - Locations updated as at Tuesday, 22 December 2009 05:16 pm , Singapore)

United States of America, USA . United Kingdom, UK (England, Scotland, Wales, Northern Ireland) . Canada . Afghanistan . Albania . Algeria . American Samoa . Andorra . Angola . Anguilla . Antarctica . Antigua & Barbuda . Argentina . Armenia . Aruba . Australia . Austria . Azerbaijan . Bahamas . Bahrain . Bangladesh . Barbados . Belarus . Belgium . Belize . Benin . Bermuda . Bhutan . Bolivia . Bonaire . Bosnia-Herzegovina . Botswana . Brazil . British Virgin Islands . Brunei Darrusalam . Bulgaria . Burkina Faso . Burundi . Cambodia . Cameroon . Cape Verde . Cayman Islands . Central African Republic . Chad . Channel Islands . Chile . China . Christmas Island . Colombia . Comoros . Congo . Congo (Dem. Rep.) . Cook Islands . Costa Rica . Cote d'Ivoire . Croatia . Cuba . Curacao . Cyprus . Czech Republic . Denmark . Djibouti . Dominica . Dominican Republic . East Timor . Ecuador . Egypt . El Salvador . Equatorial Guinea . Eritrea . Estonia . Ethiopia . Falkland Islands and Dependencies . Faroe Islands . Fiji . Finland . France . French Guiana . French Polynesia . Gabon . Gambia . Gaza . Georgia . Germany . Ghana . Gibraltar . Greece . Greenland . Grenada . Guadeloupe . Guam . Guatemala . Guinea . Guinea-Bissau . Guyana . Haiti . Hawaiian Islands . Honduras . Hong Kong . Hungary . Iceland . India . Indonesia . Iran . Iraq . Isle Of Man . Israel . Italy . Ivory Coast . Jamaica . Japan . Johnston Atoll . Jordan . Kazakhstan . Kenya . Kiribati . Korea (North) . Korea (South) . Kuwait . Kyrgyzstan . Laos . Latvia . Lebanon . Leeward Islands . Lesotho . Liberia . Libya . Liechtenstein . Lithuania . Luxembourg . Macau . Macedonia . Madagascar . Malawi . Malaysia . Maldives . Mali . Malta . Marshall Islands . Martinique . Mauritania . Mauritius . Mexico . Micronesia (Federated States) . Midway Islands . Moldova . Monaco . Mongolia . Montserrat . Morocco . Mosquito Coast . Mozambique . Myanmar (Burma) . Namibia . Nauru . Navassa Island . Nepal . Netherlands . Netherlands Antilles . New Caledonia . New Zealand . Nicaragua . Niger . Nigeria . Niue . Norfolk Island . Northern Mariana Islands . Norway . Oman . Pakistan . Palau . Palestine . Panama . Papua New Guinea . Paracel Islands . Paraguay . Peru . Philippines . Pitcairn Islands . Poland . Portugal . Puerto Rico . Qatar . Reunion . Romania . Russia . Rwanda . Ryukyu Islands . Saint Helena . Saint Kitts and Nevis . Saint Lucia . Saint Pierre & Miquelon . Saint Vincent & The Grenadines . Samoa . San Marino . Sao Tome & Principe . Saudi Arabia . Senegal . Serbia . Seychelles . Sierra Leone . Singapore . Slovakia . Slovenia . Solomon Islands . Somalia . South Africa . Spain . Sri Lanka . Sudan . Suriname . Swaziland . Sweden . Switzerland . Syria . Taiwan . Tajikistan . Tanzania . Thailand . Togo . Tonga . Transkei . Trinidad & Tobago . Tunisia . Turkey . Turkmenistan . Turks and Caicos Islands . Tuvalu . US Virgin Islands . Uganda . Ukraine . United Arab Emirates . Upper Volta . Uruguay . Uzbekistan . Vanuatu . Vatican City (Holy See) . Venezuela . Vietnam . Wake Island . Windward Islands . Yemen . Yugoslavia . Zaire . Zambia . Zimbabwe

Copyright © 2005 - by Larry Lim, Singapore - Article Search Engine Directory at ArticleSphere.com™
All Rights Reserved Worldwide. All Trademarks and Servicemarks are the property of the respective owners.