Property taxes are insane, and you need some smart ways to avoid paying such taxes. Although you should always pay what is due, some of the taxes are not necessary at all and avoidable through the available loopholes. Thankfully, due to the new taxation system, the property taxes are much relieved, and we will not face any issues. With the introduction for GST for property purchase, it is easier to calculate and pay the taxes.

If you are unaware about the taxation system for properties and want to save taxes while buying a new property, then you are at the right place. In this post, we are going to share some fantastic ways to save property taxes on your new property.

Tax Exemption for Different Types of Properties in India

Every state in India follows the different sets of rules for taxation. With the GST, all of the states are complying the universal taxation system, but the other set taxes like the property taxes and stamp duties are different in all of the states.

#1 - GST

GST is the newest addition to the taxation system of India. The Goods and Services Tax is applicable only for the under-construction property. That means, if your property is still under construction, you have to pay the GST on your property. But if you purchase a ready-to-move-in property, from the project that has received the certification of completion, you’ll have to pay no GST on the property. So, try to buy the property that is ready-to-move-in to save money on GST.

#2 - Stamp Duty and Registration Charges

All of the property registrations require the Stamp Duty and Registration charges. You cannot escape from the Stamp Duty and registration charges. All of the Indian states charge different percentages of the Stamp Duty and registration charges. But there is a massive relief as the amount is deductible under Section 80C of the Income Tax Act,1961. You can claim the deductions up to Rs. One hundred fifty thousand under this section and save some money spent on Stamp Duty and Registration Charges.

#3 - Home Loan Tax Deductions

The Income Tax Act, 1961, provides a ton of deductions for the homeowners who have received the home loan for the property. With the different deductions for Home Loan Repayment, Interest Repayment, Joint Home loans, and for the first time buyers, it is easier to save a ton of money. You can deduct a maximum of Rs.200,000 for interest repayment, according to section 24. The section 80C allows you the deduction of 1.5 lacks on principal repayment, and Section 80EE provides you the deduction of additional rs. 50,000 if you are a first-time buyer.

Final Words for Save Money While Paying Property Taxes on New Property

Paying taxes while buying the property is inevitable. But if you know how the taxation system works for the property purchase and sale in your state, then you can easily save a ton of money. With these three highly useful tips, you can be a smart buyer and save a lot of money that you would have spent without the knowledge of any of these taxation tips.