A very good news has come up for the first time home-buyers who are looking out for an affordable housing.
However, the first-time buyers might feel under-confident regarding the heavy taxes they need to pay but this problem has been solved by the FM.
The Finance Minister Nirmala Sitharaman has expanded the tax benefits under the Section 80EEA of the Income Tax Act, 1961. It will remain effective till March 2022.
Now let’s come to its selection criteria, under this section 80EEA, an individual purchasing residential property that costs to Rs 45 lakh will now become entitled to get an additional tax benefit.
An additional tax benefit of Rs 1.5 lakh will be provided on payment of interest on home loan. Further, it will be under addition to Rs 2 lakh which will be available under the Section 24(b).
Hence, at the end, the person will get an exemption cumulating at Rs 3.5 lakh.
A home buyer has to take 90 percent loan on the residential property which is valued at Rs 45 lakh.
The tenure should be 20 years and the interest rate should be 9 percent to finish the Rs 3.5 lakh deduction limit.
Currently, the home buyers are unable to exhaust the permitted limit of tax concession.
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