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If you are planning to buy a dream home, its important to know the exact amount of tax you will need to pay. See below for more details.
Buyer's Guide
Know it before you own it!
All Sowrem Promoters properties offered for sale have clear titles. All Sowrem Promoters projects are approved with most leading banks and financial institutions for availing home loans.
You can avail a maximum loan of 80% of the Agreement value. However your loan amount may differ as per your income eligibility as appraised by the bank. All loans are at the sole discretion of the bank.
Loan tenures to a maximum of 30 years, depending on age.
The documents required are as follows:
- Last 3 months Salary Slip
- Form 16
- Repayment Track record of existing loans/Loan closure letter
- Bank Statement for the last 6 months from Salary Account
Applicants
Salaried
- Completed Application Form
- Photograph
- Photo Identity Proof
- Residence Address Proof
- Signature Verification Proof
- Age Proof
- Fee Cheque
Applicants
Self Employed
- A brief introduction of Business/Profession
- Photo Identity Proof, Residence Address Proof, Signature Verification Statement for all the main partners/directors
- Repayment Track record of existing loans/Loan closure letter
- Board Resolution in case of a company
- Proof of existence of the company
- Office Address Proof
- Income Tax Return / Computation of Total Income / Auditors Report / Balance Sheet / Profit & Loss Account certified by Chartered Accountant for last 2 years (both for business and personal of partners/directors)
Tax
Benefits
Do i get a Tax Benefit on the Housing Loan?
Yes
Do i get deduction on Interest?
The repayment of the interest portion of the EMI is allowed as a deduction under section 24 if the purchase or construction is completed within a period of three years from the end of the year in which the loan is take under the head "income from house property" up to Rs. 2,00,000/- for self-occupied property and full amount of Interest in case of let-out property provided that loss from such let out house property does not exceed Rs 2lakhs.
Do i get deduction on Principal Repayment?
The repayment of principal amount of the loan can be claimed as a deduction under section 80C up to a maximum amount of Rs. 1.5 lakh. You can also claim deduction under Section 80C towards payment made for stamp duty, registration fee and other expenses for the purpose of transferring the property in the name of the assessed. All these deductions however should not exceed the overall limit of Rs. 1.5 lakh.
However, deduction under Section 80C is not available in respect of payment made towards the cost of any addition, alteration, renovation or repair carried out after the issue of the completion certificate.
Income from House Property
According to the Indian Income Tax Act, if a person (resident or NRI) owns more than one house property, only one of them will be deemed as self-occupied. There will be no income tax on a self-occupied property. The other one, whether rented or not, will be deemed to be given on rent and deemed rental income (based on certain valuations prescribed by the income tax rules) will be added to income. Further, TDS will be deducted on actual rental incomes earned by NRI.
Wealth Tax
Wealth tax is levied on the value of specified assets in excess of the Rs. 30,00,000. Specified assets include house property. However, the Wealth Tax Act provides an exemption in respect of one house property. There is a specific exemption available for returning Indians in respect of investment made in house property out of money brought from outside India or from balances held in NRE accounts as on date of return to India.
Capital Gains
If a residential property is held by the seller for more than 36 months, it is considered a long-term investment or else short term. Long Term Capital Gain shall be computed by considering Indexed cost of acquisition. NRIs are entitled to claim exemption from capital gains tax if they reinvest in specified assets as per Income Tax Act.
Certificate for deduction at Lower Rate or Tax Excemption Certificate
Section 197 of the Income Tax Act, 1961 provides for deduction of tax at lower rates in certain cases. The rate prescribed for TDS from NRI's income is the maximum rate of tax at which relevant Income is taxable in India. However, in majority of the cases of NRI, the actual tax liability is lower than this.
However, the higher deduction of tax so made is generally not claimed as a refund by filing Return of Income. In order to assist such situation, the Income Tax Act has provided procedure under section 197 whereby an NRI can apply to the Assessing officer (in prescribed form) to issue specific certificate authorizing the payer of income (who normally deducts tax at highest prescribed rate) to deduct tax at a lower rate or nil rate. The NRI should estimate his income, tax liability and likely TDS and then apply for partial or complete Tax Exemption certificate.
NRI
Foreign Investors
An Indian Citizen who stays abroad for employment or is carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an non- resident Indian is an NRI. Person who is not resident in India for a period over 182 days is a non-resident Indian. Persons posted in U.N. organizations and officials deputed abroad by Central/State governments and Public Sector undertakings on temporary assignments are also treated as non-residents.
Under the provisions of Foreign Exchange Management Act a person of Indian origin is an individual (other than a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan) who at any time held an Indian passport, or he or his father or his grandfather was a citizen of India by virtue of the Constitution of India or Citizenship Act, 1955 (57 of 1955).
NRIs and PIOs do not require permission from RBI to acquire residential / commercial premises in India (other than agricultural land/farm house/plantation property).
The sale proceeds of immovable property other than agricultural land / farmhouse / plantation property can be remitted out of India on fulfillment of certain conditions.
Yes. NRIs can obtain loans. However repayment of loan should be made within a period not exceeding 15 years out of inward remittances or out of funds held in the borrower's NRE/FCNR/NRO accounts.
Reserve Bank permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passports subject to certain conditions.
Yes. General permission has been granted by Reserve Bank to NRIs and PIOs to transfer by way of gift immovable property held by them in India to relatives and charitable trusts/organizations subject to compliance of the condition the provisions of other applicable laws.
Yes. Reserve Bank has granted general permissions for letting out any immovable property in India. The rental income or proceeds of any such income are eligible for repatriation subject to payment of taxes and production of a certificate issued by a chartered accountant with the guidance of an Authorized Dealer such as a bank for completion of formalities.
The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/FCNR/NRO accounts maintained with banks in India.
Applications for repatriation of sale proceeds are considered provided the sale takes place after three years from the date of final purchase deed from the date of payment of final installment of consideration amount, whichever is later.
Applications for necessary permission for remittance of sale proceeds should be made inform IPI 8 to the Central Office of Reserve Bank at Mumbai within 90 days of the sale of the property.
If you are an NRI who is looking to reap great benefits of buying properties in Chennai or have any queries related to property purchase, we are always ready to help you.