How does Investing in Residential Property help you Save Taxes?

Ready to learn a clever way to help you pay less in taxes? Investment in residential property may be your saving grace! Whether you’re a renter or a homeowner, this tax break could benefit you in more ways than one. So, in this Achal Chaurasia news, let’s get savvy and explore how investing in residential property can lead you to a hefty tax return!

  1. Income Tax Saving on Home Loan

If you are wondering how to save taxes on a home loan, then it is important to know that there are different ways of saving taxes. One such way involves taking a home loan and paying interest on it. You can take some money as an advance and pay interest on it later. This way, you do not need to pay tax at the time of taking out the loan but after repaying the principal amount plus interest (or any other charges).

Similarly, if your house is purchased through bank finance or through any other mode of funding source like equity share capital or funds raised from other sources like the sale of shares etc; then also no income tax will be deducted in this case because these are considered as capital assets which do not show up as taxable income.

  1. Claiming a Home Loan Principal Repayment Tax Deduction

If you are a home loan borrower, you can claim an income tax deduction for the amount of principal repayment. This deduction is allowed at the marginal rate of your tax slab.

The maximum amount of this deduction that can be claimed by an individual or HUF is Rs 1 lakh per year from January 1st, 2017 to December 31st, 2030 (i.e., up to Rs 3 lakh). In case there is any excess over this limit then only 50% of such amounts will be eligible for an income tax deduction and the remaining 50% will be added towards interest payment on home loans and cannot be claimed as a deduction in future years after paying off the loan principal amount with interest.

  1. Payment of Housing Loan Interest: Income Tax Deduction Amount

If you have paid a housing loan interest and want to claim the tax deduction, then it is important to know that there are certain conditions that need to be fulfilled. The first condition is that you must have taken out a home loan for your own residence. You can even buy an apartment as long as it’s located in India or outside India but within its jurisdiction such as Dubai; but not abroad!

The second condition is that your income from other sources should be less than Rs 1 crore per year (which includes salary and other forms of income). If these two conditions are fulfilled then there will be no issue in claiming the deduction under section 24(A) of the Income Tax Act 1961; however, if they aren’t satisfied then there could be issues with regard to how much money you need to pay back each month.

  1. First-Time Homebuyers in India 

Are you looking for an extra “tax break”? If yes, then you’re in luck! You can avail of an additional tax benefit of Rs. 50,000 for interest paid on your home loan. All you need to do is buy your first house, the loan amount not exceeding Rs. 35 Lakhs, and the value of the property not over Rs. 50 Lakhs. Not only this, but this benefit is over and above the deduction already taken under section 24! So don’t let this tax-filing season pass without making the most of this benefit!

Apart from that, section 80C of the Income Tax Act allows a deduction of up to Rs. 1.5 lakhs (US$2,000) for investment in residential property. This means that if you purchase a house or apartment with your own money and pay it off within three years, you can claim an income tax deduction under Section 80C of the Income Tax Act. The amount that can be deducted will depend on whether it’s personal use or business use of the property as well as other factors such as age limits and other restrictions imposed by law on taxpayers who have purchased various assets like land, cars, and so on!

  1.  Stamp Duty & Registration Charges

The government charges stamp duty and registration charges for buying or selling property. This is the basic tax on you as a buyer or seller of property. Stamp duty is payable on the transfer of property from one owner to another, while registration charges are payable on the registration of new properties in your name.

In 2016-17 when someone purchased their first apartment as an investment, they can be charged about Rs 1 lakh ($15K USD) as stamp duty by my state government. The amount included both registry fees (which cover costs related to registering documents such as title deeds) and land value tax (LVT). In addition to this amount, there were other expenses such as legal fees incurred during registration – all these expenses were borne by me individually rather than being covered by an insurance company.

Now, Section 80C of the Income Tax Act allows you to take advantage of stamp duty and registration charges paid while purchasing a home, up to Rs.1,50,000. These benefits can be claimed at the time of payment and do not depend on whether a loan has been taken or a deduction made.


As we’ve seen in this Achal Chaurasia news, you can certainly save taxes by investing in residential property. Not only can you save taxes, but the appreciation of the value of your property will help you gain financial security. All in all, investing in residential property is a proper way to save taxes, build wealth, and secure your financial future. So take the plunge and start investing in residential property today!

Also, read- Reasons you should start investing in your early 20s

Author- Achal Chaurasia

A superior and highly experienced entrepreneur in the field of business for quite a long time now. Also, a philanthropist, author, and public speaker who believes in working towards the overall well-being and betterment of society as a whole.

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