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Property tax is a mandatory charge collected by your municipal corporation or local government. The administration uses the funds collected from property owners to maintain local infrastructure such as roadways, transport systems, utility services, public run schools and hospitals, fire and police departments, etc.
While you should feel good about contributing to your city and neighbourhood, it is normal to feel the pinch of taxes over time. Even though you cannot eliminate it, here are some suggestions on how to reduce property tax.
All you need to do is familiarise yourself with the local laws and tax rules, and you’ll have the answer to how to save on property taxes.
Review your property tax card
The property tax card is available with your municipality or local governing body. This card has all the details of your home, including total built-up and carpet area, dimensions of different rooms, space free of FSI, etc. Ensure there are no discrepancies between what’s on paper and the actual asset, driving up your house property’s income tax.
Don’t make unnecessary alterations or additions
This may be more relevant to those who have independent homes on a land parcel. Additional construction or structural changes to the property will also attract a higher tax. If you want to keep the tax liability low, avoid making new changes unless necessary.
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Deduction on principal home loan
This may not be a direct way to reduce your property tax in India, but you can use tax deductions offered under Section 80C towards the repayment of a home loan to offset your taxable income and bring down the overall cost of ownership. You can claim up to a maximum of Rs 1.5 lakh per annum, including all other deductions under Section 80C. To mention, property tax borne as well as paid by the owner of a let out property is allowed as a tax deduction to the owner while computing his income from such let out property
Deductions on interest repayment
If you have availed of a home loan for purchasing your property, interest charged on repayment can also be offset against your ownership cost. You can claim up to Rs 2 lakh per annum under Section 24(b). If the mortgage has been applied for jointly with other family members, all applicants can claim the said deduction, as long as the combined claim does not exceed the total interest paid in the financial year.
Other concessions
Other homestead property tax exemptions may be available to farmers, super senior citizens, members of the armed forces, or those living in specific affected areas.
If you have just bought a new property, the costs incurred on stamp duty payment and registration can also be offset as a one-time deduction (in the year of purchase) under Section 80C.
To sum it up
Reducing property taxes can take a lot of ingenuity; however, one aspect of owning a home where you can secure long-term savings is a home loan with IDFC FIRST Bank. Get tailor-made mortgages at affordable interest rates for a flexible tenure of your choice, with top-up loan options, if required.
Apply here for IDFC FIRST Bank’s home loan to get your dream house at a dream price!
Disclaimer
The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirst.bank.in for latest updates.
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