It is important to be aware of tax deductions and tax liabilities when buying a home or investing in a residential property. Proper tax planning when dealing with property there is no financial loss, on the contrary, income tax benefits can be availed. So at the beginning of the new financial year, let’s find out what the revised property tax structure is.
To have your own home everyone wants to. Prices beyond the reach of a home can be a barrier to fulfilling this dream. But the dream of a home can be fulfilled in the new financial year by taking advantage of the deduction from the cheaper home loan income tax. Such taxpayers, however, need to keep a few things in mind.
80 EEA Deduction Off
Deduction of home loan interest up to Rs. Similarly, for affordable houses (houses up to Rs 45 lakh) till March 31, 2022, taxpayers will not get special rebate of up to Rs 1.5 lakh under Section 80 EEA from April 1, 2022. It was demanded that this concession be extended. But the government has not approved it. Therefore, home loan borrowers after April 1, 2022 will not be able to avail the benefit of this deduction. They will have to settle for a deduction of up to 1.5 lakh rupees.
TDS on stamp duty / over contract amount
When buying a house worth more than Rs 50 lakh, the buyer is required to pay TDS at the rate of one per cent. Tax deductions are expected to occur at every stage. The deducted tax has to be submitted online by the 30th of the next month by filling up the form on the website. The amount of the contract is important for this. In the latest budget, the amount of the contract or stamp duty,significant changes have been made that require higher tax deductions. E.g. If the stamp duty is Rs 60 lakh and the contract is for Rs 55 lakh, then the tax deduction is mandatory for Rs 60 lakh. Home buyers should keep this in mind.
Five per cent TDS on rental houses
Under Income Tax Section 194 IB, if the rent is more than Rs. 50,000 per month, the tenant should deduct TDS at the rate of 5%. The tax deduction should be made in March of the financial year and the online payment should be made within 30 days. This provision applies to all types of tenants. It also includes Hindu undivided families. The tenant is required to provide a tax deduction certificate to the landlord upon payment of tax. The tenant can get this certificate from the income tax website. TAN number is not required when paying tax. All you need to do is enter the homeowner’s PAN number.
A little relief on capital gains
The tax rate on capital gains on the purchase of a home is 20%. Many people accept the option of paying taxes if they do not want to buy another house. In such a case surcharge is applicable along with the basic tax. Taxpayers earning more than Rs 50 lakh have to pay a surcharge of 10 per cent. The surcharge increases as the income increases. Taxpayers earning more than Rs 2 crore have to pay a surcharge of 25 per cent along with the basic tax. In the budget of 2022-23, the surcharge will be a maximum of 15%. So give the taxpayers a little relief when paying taxes on the huge capital gains made from home sales Has received.
With the stock market soaring for the past two years, many taxpayers are trying to sell their shares and buy homes. 10 per cent income tax has been levied on capital gains from 2019 on sale of shares. This income tax is levied on those who sell a large number of shares or equity mutual funds to buy a home.
Tax planning on capital gains
In order to save income tax, if the house is purchased within one year before or after the sale of the shares or if the house is completed within three years, then the capital gain on the shares is completely tax free under section 54F.
This deduction may be sought in the return if the conditions under this section are met. An important condition is that when selling shares, the taxpayer should not have more than one house in his name. Taxpayers should use this clause to plan capital gains tax on the sale of shares or investments in equity mutual funds.
Courtesy : Maharashtratimes.com