Tax Saving Tips

Tax Saving Tips to help you wisely Invest in Real estate,

  1. to get maximum tax benefits, and
  2. high Return on Investment for your hard earned money.

Many of us like to invest our money in Investments with high ROI potential.

The most common question among tax paying investors is, What are investment options available with high ROI?

Even if we ask the question to a 10 year old, the answer would be "Real estate".

But, what about the tax benefits?

In this article you can find summarised information related to income tax benefits available for various real estate properties.

Here you can find,

what are the properties you can invest in?

When to buy?

When to sell?

What benefits you can claim? etc.,

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Residential House - Tax Saving Tips

Minimum Period of Holding required for Tax Exemption on Capital Gains is 3 Years.

What are the benefits you can enjoy during the period of holding?

Own Use

  1. If only 1 property held and used for own residence, no rental income to be offered.
  2. Also, deduction for interest on loans (up to Rs.2.00 lakhs per annum) can be claimed as loss.

Let-Out

  1. In any other case, Annual Value of the Property has to be offered as income.
  2. Municipal Tax, Standard Deduction of 30% of Annual Value and the entire Interest on Loan can be claimed as deduction.

What is the tax exemption available upon transfer of your Property?

If you are assessed as an Individual or HUF, you can invest in Residential House, subject to conditions of section 54.

Any one can Invest in Bonds notified under section 54EC.

Also, one can use the benefits of section 54GB by investing in shares of a start-up company.

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Residential Flats

It is almost similar to residential house. Minimum Period of Holding required for Tax Exemption on Capital Gains is 3 Years.

What are the benefits you can enjoy during the period of holding?

Own Use

If only 1 property held and used for own residence, no rental income to be offered.

Also, deduction for interest on loans (up to Rs.2.00 lakhs per annum) can be claimed as loss.

Let-out & Deductions

In any other case, Annual Value of the Property has to be offered as income.

Municipal Tax, Standard Deduction of 30% of Annual Value and the entire Interest on Loan can be claimed as deduction.

What is the tax exemption available upon transfer of your Property?

If you are assessed as an Individual or HUF, you can invest in a residential house or flat, subject to conditions of section 54.

Any one can Invest in Bonds notified under section 54EC.

Also, one can use the benefits of section 54GB by investing in shares of a start-up company.

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Commercial Buildings - Tax Saving Tips

Minimum Period of Holding required for Tax Exemption on Capital Gains is 3 Years.

What are the benefits you can enjoy during the period of holding?

Own Business

If used for own business, then no income is chargeable.

Depreciation, Repairs & Other Expenses can be claimed as deduction.

Let-Out

In any other case, Annual Value of the Property has to be offered as income.

Municipal Tax, Standard Deduction of 30% of Annual Value and the entire Interest on Loan can be claimed as deduction.

What is the tax exemption available upon transfer of your Property?

If you are assessed as an Individual or HUF, you can invest in Residential House, subject to conditions of Section 54F.

Any one can Invest in Bonds notified under section 54EC.

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Plots

Minimum Period of Holding required for Tax Exemption on Capital Gains is 3 Years.

What are the benefits you can enjoy during the period of holding?

No major benefit.

What is the tax exemption available upon transfer of your Property?

If you are assessed as an Individual or HUF, you can invest in Residential House, subject to conditions of Section 54F.

Any one can Invest in Bonds notified under section 54EC.

Also, one can use the benefits of section 54GB by investing in shares of a start-up company.

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Factories with Plant and Machinery - Tax Saving Tips

Minimum Period of Holding required for Tax Exemption on Capital Gains is 2 Years.

What are the benefits you can enjoy during the period of holding?

Depreciation on Building and Plant & Machinery can be claimed as Deduction.

What is the tax exemption available upon transfer of your Property?

Benefit under section 54D or 54G or 54GA can be claimed (subject to conditions).

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Agricultural Land - Tax Saving Tips

Minimum Period of Holding required for Tax Exemption on Capital Gains is 2 Years.

What are the benefits you can enjoy during the period of holding?

Entire amount of agricultural income earned from the land is exempt subject to its inclusion for rate purposes.

What is the tax exemption available upon transfer of your Property?

Capital Gains on sale of Agricultural Land in rural areas are fully exempt.

In any other case benefit under section 54GB can be claimed.

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Warehouse

Minimum Period of Holding required for Tax Exemption on Capital Gains is 3 Years.

What are the benefits you can enjoy during the period of holding?

Exemption is available for a period upto 10 years under section 80IB, subject to certain conditions to be fulfilled.

What is the tax exemption available upon transfer of your Property?

If you are assessed as an Individual or HUF, you can invest in Residential House, subject to conditions of Section 54F.

Any one can Invest in Bonds notified under section 54EC.

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Cold Storage Units - Tax Saving Tips

Minimum Period of Holding required for Tax Exemption on Capital Gains is 3 Years.

What are the benefits you can enjoy during the period of holding?

Exemption is available for a period upto 10 years under section 80IB, subject to certain conditions to be fulfilled.

What is the tax exemption available upon transfer of your Property?

If you are assessed as an Individual or HUF, you can invest in Residential House, subject to conditions of Section 54F.

Any one can Invest in Bonds notified under section 54EC.

Top

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