Buying a new house is a significant financial decision that requires careful planning and consideration. In India, the Real Estate (Regulation and Development) Act, 2016 (RERA) and income tax regulations play crucial roles in the process. Understanding these factors is essential to make informed choices and ensure a smooth and hassle-free home-buying experience. In this blog post, we will explore the key aspects of RERA and income tax that buyers should keep in mind while purchasing a new house and home loan benefits under the Income Tax Act.
RERA is a landmark act enacted to regulate the real estate sector in India. It aims to protect the interests of home buyers and promote transparency in real estate transactions. RERA establishes state-level regulatory authorities to oversee the implementation of the act. Developers and builders must register their projects with the respective state RERA authorities. Ensure that the project you are interested in is RERA registered, as it provides legal protection and ensures compliance with regulatory norms. Check the RERA registration number, project details, and completion timeline before making a purchase.
The following are the rights and responsibilities under the RERA:
Home buyers can avail tax benefits on the interest paid on home loans under Section 24(b) of the Income Tax Act. Under this section, individuals can claim a deduction of up to Rs. 2 lakh per year on the interest component of their home loan. Apart from the interest deduction, home buyers can also claim deductions on the principal repayment of the home loan under Section 80C of the Income Tax Act. The maximum deduction allowed under this section is Rs. 1.5 lakh per year, which includes other eligible investments and expenses.
The government has introduced additional tax benefits for affordable housing projects under Section 80EEA.
Purchasing a new home involves careful consideration to avoid any pitfalls. Two crucial aspects that home buyers need to understand are the Real Estate Regulation and Development Authority (RERA) and Income Tax laws. RERA is designed to safeguard the rights of home buyers and promote transparency in the real estate industry. Meanwhile, Income Tax laws have implications on the tax obligations of home buyers. By familiarizing themselves with these factors, home buyers can make informed choices and navigate the process smoothly.
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