×
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT

Realty Reopens! Plan now for best deal on your new home 

Last Updated 01 March 2021, 13:38 IST

An efficient financial plan helps you acquire a home at the best price, and over a period of time, enhances your capital gains from the property too

The last two months of a financial year are always crucial. While many make their last-minute tax planning in these months to save whatever they can, it makes more sense to plan for the coming year. Locking into bad investments just to save tax on 30 per cent of the amount is a bad idea. Planning for the coming year early is a wiser and better move. Especially so in case you have a home on your mind.

We are now past the pandemic for all practical purposes. The sentiment is turning more positive by the day as the number of active cases continues on a downward trend. The economy is opening up. The financial year 2021-22 promises to be the beginning of a growth phase. More jobs, more disposable income and more business opportunities. Combine this with a buyer’s market that offers attractive rates, lucrative schemes and a variety of options, and you have a rare opportunity to bag a good deal that may not be available in the next, or even later this year. So, why not use these last months of the current financial year to plan your house purchase? There are many upsides to this.
To know more: https://www.deccanherald.com/brandspot/credai_super_saver.html

Tax planning more effective

The tax benefits available against a home loan is a crucial factor. It brings down the effective cost of a home. Added with the existing low interest rates, the impact is even more. This is a good time to avail a home loan.

The Income Tax Act allows for a maximum deduction of Rs 2 lakhs against interest paid per annum under Section 24. This is for a loan availed for a self-occupied house. If the loan is availed for a second home that is rented out, there is no limit on the amount that can be claimed as a deduction. The Act also allows a deduction of Rs 1.50 lakhs against the principal component repaid in the financial year. This deduction is under Section 80C.

“When the purchase is made in the beginning of the financial year, you get maximum benefit for that year. This is a better way of saving tax. You build an asset at a lower cost and at the same time don’t venture into bad investments at the end of the year”, says Kishore Jain, President, CREDAI Bengaluru.
To know more: https://www.deccanherald.com/brandspot/credai_super_saver.html

Facilitates efficient financial planning

The beginning of the financial year is the right time to plan your investment bouquet. With a clear picture of the amount you will pay as EMIs and the deductions you will get, your approximate disposable income is easier to arrive at. It will also be a more accurate estimate. This helps in a more efficient financial plan for the year.

The allocations to various instruments – debt, equity, retirement, contingency and impending big-ticket expenses - can be made more efficiently. This helps in better-informed and a more scientific approach to investment planning, thereby optimising returns. “Knowledge of expenses that will accrue through the year will help you budget for them and arrive at the right mix of expenses, savings and investments. This will protect you from getting into a debt trap. Therefore, knowing your outgo towards EMIs in the beginning of the financial year makes your financial plan more effective, given that EMIs are a big chunk of annual expenses in many cases”, says Errol Fernandes, Secretary, CREDAI Bengaluru.
To know more: https://www.deccanherald.com/brandspot/credai_super_saver.html

Offers galore

Many post-festive season offers beckon prospective homebuyers around this time of the year. Pre-launch offers, EMI holiday and many such offers make the home purchase easier on the pocket. They save precious funds, and given the present condition, this is a boon that makes balancing the household budget easier.

A prospective homebuyer needs to combine the benefits of these offers with the tax sops and attractive property prices available at the moment to arrive at the real cost of the property. The savings gained can be ploughed into other investment avenues. It also helps to use these savings to build a corpus that can be used later to make part prepayments on the home loan to bring down the overall cost of finance.

“It is also prudent to note that efficient financial planning, while reducing the effective cost of acquisition of property, also consequently enhances its capital gains. In the event of liquidating the property at a later date, the real returns on investment – capital gains – will be higher to that extent”, explains Errol Fernandes.
To know more: https://www.deccanherald.com/brandspot/credai_super_saver.html

Location advantage

The location of a property is, in most cases, the most significant factor influencing the purchase. No matter how suitable the property in terms of cost, design and amenities, a prospective homebuyer will not buy it if it is not located in a preferred neighbourhood. At this point in time, with the attractive prevailing rates, homebuyers can even evaluate properties that may go beyond the given budget later as the economy gains momentum and demand for homes increases.

A buyer’s market lasts only till such time as supply outstrips demand. Once the inventory begins to deplete, prices begin to move up. This is a simple factor of the demand-supply equation in every market – the real estate market is no different. The same project will command a higher price as demand for homes picks up.

An efficient financial plan therefore helps a prospective homebuyer get the home at the best price, and thereby make a lucrative investment too.
To know more: https://www.deccanherald.com/brandspot/credai_super_saver.html

This article is part of a featured content programme.
ADVERTISEMENT
(Published 01 March 2021, 12:59 IST)

Follow us on

ADVERTISEMENT
ADVERTISEMENT