Home-ownership in India means more than just having a piece of property. It gives the owners a sense of belonging. It is a symbol of financial stability as well as a source of pride and security for them. Owning a home is like reaching a huge financial milestone and is one of the most influential incentives for the people in India to work hard and save money.
More and more people are deciding to invest in residential properties instead of living in rented establishments as tenants. This indicates that the number of home buyers in the country has increased tremendously and continues to grow. The Indian Government is also offering some benefits to encourage and assist the first time home-buyers of India.
People who fall under the lower-income group (LIG) and middle-income group (MIG) categories often find it difficult to get funding for their dream homes. And even if they manage to get an approved home loan, they face difficulties in the repayment of the same. Taking these factors under crucial consideration, the Government of India provides certain benefits to assist these first-time home-buyers. Pradhan Mantri Awas Yojana (PMAY), CLSC for economically weaker sections (EWS) are a few examples of the benefits provided by the Government.
There are several sections providing relief to first-time home-buyers on the interest payable on the home loan.
Here are some of the benefits enjoyed by first-time home-buyers in India:
Section 80C
Under this section, the borrower can claim tax benefit up to a sum of Rs.1.5 lakh on the repayment of the principal amount of loan borrowed.
Section 24
Under this section, borrowers can avail tax benefit up to Rs.2,00,000 on the repayment of the interest of their home loan. However, this benefit is only applicable to self-occupied properties.
Section 80EE
Under Section 80EE, first time home buyers are given the opportunity to avail a tax deduction of Rs.50,000 as a tax benefit on repayment of interest charged on the home loan.
The Pradhan Mantri Awas Yojana (PMAY)
“Housing for All” is a mission focusing on urban society. It has been under progress and it will be effectively implemented during the years from 2015 to 2022. This mission aims to accommodate housing for all.
PMAY was initiated to give subsidy to first-time homebuyers. It makes home-buying more affordable for the people belonging to lower and middle-income groups. The subsidy can be availed at different rates that entirely depend on the income of the borrower. People having income up to Rs.18 lakhs are eligible to avail this benefit.
People who earn an annual income below six lakh get a subsidy of 6.5 percentage points on the principal part of Rs.6,00,000 regardless of the total home loan borrowed by them.
A subsidy of four percentage points is allowed on the principal component of Rs.9,00,000. This is for the people who earn an annual income of about 12 lakh.
The Real Estate market in India is growing vastly and investment made in this area often come with guaranteed returns. People belonging to all groups and categories are being encouraged to make the most of these benefits and invest more in real estate so that they too can live the dream of residing in their dream home.