With the introduction of Goods and Services Tax (GST), the taxation system related to purchase of property has been simplified. Earlier, there used to be many taxes on purchase of properties like VAT and service tax.
People can also now avail tax benefits which will make things easy for them. It will definitely ease the burden on the pocket of the home buyers.
If we talk about the under-construction properties, the builders are having the option to choose between the old tax rates and the new ones. The GST rate on under-construction properties have has been reduced from 12 per cent to 8 per cent.
As far as the tax deducted at source is concerned, it is charged at one per cent for the properties with valuation of more than or equal to Rs 50 lakh. It is deducted by the home buyers while making payment to the seller.
If the residents are opting for ready-to-move-in properties, they are not required to pay the GST. But, for this, the property should be having the completion certificate (CC).
When it comes to tax deductions, the home buyers can avail the benefit under the Section 80C of the Income Tax Act, 1961. The buyers can claim the deduction up to Rs 1.5 lakh after fulfilling all the conditions.
The tax exemptions can only be availed when the property is fully constructed. One can only claim for the deductions for the payments made in the year of claim. The property should also be for self-use only in order to claim deductions.TAGS: Taxes on properties / GST on under-construction property / GST on ready-to-move property / Tax benefits on purchase of property / Property news