Tax Benefits for First Time Home Buyers
Have you just joined the league of proud homeowners or about to make your very first home purchase? Finally your luck knocks your door as the Union Budget 2017-18 brings great cheers for the first time home buyers.
Now you must be pondering upon in what way is the government providing relief to the newbies of the home buying process. The relief comes in the forms of lowered interest rates, making it more palatable or more acceptable for those who are starting out to carve their dreams. The prime focus has been on the income slabs and subsidies that have been laid down in the guidelines, in accordance with the same.
If you come under the annual income slab of INR 12 lakh and INR 18 lakh, then there’s something to be really happy about. For starters, those earning up to INR 12 lakh annually will get an interest subsidy of 4% on a principal amount of INR 9 lakh, and 3% on a principal amount of INR 12 lakh for those earning up to INR 18 lakh per annum. However, if your income is below the slab of INR 6 lakh per annum, you’ll be the recipient of 6.5% subsidy on a principal amount of INR 6 lakh that too, irrespective of the total loan amount!
Let’s simplify this. For example, if you have borrowed INR 20 lakh for buying a house at 9% per annum. You only have to pay 2.5% interest on INR 6 lakh and on INR 14 lakh, you have to pay 9% interest. People under all the three categories, as mentioned , will enjoy a benefit of INR 2.4 lakh (assuming an interest rate of 9% per annum) according to the Prime Minister’s Pradhan Mantri Awas Yojana.
This is the first time that the spotlight is on the middle-income groups and the policies are being crafted keeping them in the center. Affordable housing has become an important sector, and the new scheme is a game changer as per experts. Even the banking professionals and financial experts are in agreement, and would also tell you that the residential projects are now more affordable as the EMIs have fallen.
Finally it is the right time for the home buyers to go for that long awaited leap to buy their very own dream home. Cheers to all the beginners!