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Page 32 - Customer Manual01
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11. TAXATION & BENEFITS






                                                                                                                                          Owning a home is great responsibility. We have to pay taxes as per the law. The
                                                                                                                                          existing taxation responsibilities are :-
                                                                                                                                          Paying TDS
                                                                                                                                          Paying GST
                                                                                                                                          Paying Stamp Duty & Registration


                                                                                                                                          What is TDS?

                                                                                                                                          TDS stands for Tax Deducted at Source. As per the Income Tax Act, any company
                                                                                                                                          or person making a payment is required to deduct tax at source if the payment
                                                                                                                                          exceeds certain threshold limits. TDS has to be deducted at the rates prescribed
                                                                                                                                          by the tax department. For a residential home, buyer will have to deduct currently
                                                                                                                                          1% and pay to IT.
                                                                                                                                          What is GST?

                                                                                                                                          Goods and Service Tax (GST) is an indirect tax (or consumption tax) levied on the
                                                                                                                                          supply of goods and services. GST is levied at every step in the production process,
                                                                                                                                          but is refunded to all parties in the chain of production other than the final
                                                                                                                                          consumer.The GST is paid by constomers, but it is remitted to the government by
                                                                                                                                          the businesses selling the goods and services. Government has linked GST rates
                                                                                                                                          based residential unit sizes. For larger units (above 55.7 sqms) it is 12% whereas
                                                                                                                                          for smaller affordable units it is 8%.
                                                                                                                                          Tax Benefits

                                                                                                                                          Purchasing a home on a loan is a lot more than pure happiness. You enjoy multiple
                                                                                                                                          tax benefits with it too! These benefits and exemptions not only help you save tax,
                                                                                                                                          but they also help in managing smooth cash flows.
                                                                                                                                          Here are the deductions that income tax authorities offer to individuals who have
                                                                                                                                          taken a housing loan from specified financial institutions:

                                                                                                                                          Under Section 24 of the Income Tax Act
                                                                                                                                          The  interest paid on capital borrowed for the acquisition, construction, repair,
                                                                                                                                          renewal or reconstruction of property is entitled to a deduction. Rs 2, 00,000 is the
                                                                                                                                          maximum amount eligible for deduction basis IT guidlines.


                                                                                                                                          Under Section 80C of the Income Tax Act
                                                                                                                                          You can get a maximum Rs.1, 50,000 deduction from the income, on repayment of
                                                                                                                                          principal during a financial year. Stamp duty, registration fee or other such
                                                                                                                                          expenses paid for the purpose of transfer of such house property to the assessed
                                                                                                                                          is also considered under this amount. All these deductions should not exceed the
                                                                                                                                          overall limit of Rs. 1 lakh. However, deduction under Section 80C is not available
                                                                                                                                          in  respect  of  payments  made  towards  the  cost  of  any  addition,  alteration,
                                                                                                                                          renovation or repair carried out after the issue of the completion certificate.
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