Hot tips that will lead to cool savings on tax

Hot tips that will lead to cool savings on tax
Home loan interest: If you have purchased a new apartment jointly, say, with your spouse, and are also paying the home loan jointly, then both of you are entitled to deduction of Rs 2 lakh each for the interest. An additional deduction of Rs 1,50,000 is available to first time buyers subject to certain conditions.

Interest on loan taken from an employer, friend or private lender is also eligible for Rs 2 lakh deduction. Here, you need to obtain a certificate from the lender. The principal repayment will not be eligible for a deduction under section 80C.

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HRA and loans

Both HRA exemption and interest deduction on a home loan can be claimed simultaneously if you’re living in a rented house in the city where you work. The house financed with the loan should be in another city.

House rent

Deduction of up to Rs 5,000 per month under Section 80GG for rent paid can be claimed even if the employer doesn’t give HRA. However, neither the employee, nor his/her spouse and minor child must own a house.

House sale

Hold on to your house for over two years before selling. This holding period, makes it a long-term capital asset, entitling you to a lower capital gains tax of 20% plus indexation. Short-term capital gains are taxable at the slab rate, the highest rate being 30%….Read more>> 

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