By 2025, real estate sector in India is expected to contribute 13% of total GDP of the country. To live up to this expectation, various affordable housing schemes and tax benefits are on offer for prospective home buyers.
Income tax benefit on home loans can help buyers substantially reduce the income burden. The income tax act of India, 1961 has dedicated provisions for this cause, with various tax exemption clauses. These include –
- Section 80C of ITA states that the funds used for repayment of the principal home loan amount can be exempted from income tax. The exemption is applicable for up to Rs. 1.5 Lakh every financial year. Any amount exceeding this is subject to standard taxation.
- Section 24(b) provides a tax exemption on the interestrate payable on the total loan amount. This benefit is given for interest payments of up to Rs. 2 Lakh every financial year.
- Section 80EEA is also dedicated to reducing the burden of interest on the borrowers. You can get an additional Rs. 1.5 Lakh on your total disposable income as the tax is exempted. Note that this tax waiver is only applicable till 31st March 2020 for properties of up to Rs. 45 Lakh.
- In case of top up loans, an additional tax waiver Rs. 30,000 can be availed on the interest liable.
You can easily calculate the total tax waived on your home loan repayments using a home loan tax benefit calculator.
However, several other criteria need to be satisfied to avail these policies for tax saving on home loans.
- Exemptions are only applicable if the property has already been constructed, and is utilised as a residential property.
- If the borrower sells the property after 5 years of ownership, the tax benefits will become invalid. If the returns are already disbursed, the exemptions are reversed and added to the following year’s income.
- In case the house is given on rent, the entire home loan interest is waived off from tax exemptions.
Ensuring you fulfil the above mentioned restrictions, you can easily apply for the returns – by yourself, or through your employer. Having the home loan interest certificate at your disposal will smoothen this process by a significant amount.
The number of home loans acquired is increasing in number, mainly due to these benefits of tax waivers, reasonable housing loan interest, and subsidised rates at which you can avail home loans via government sponsored policies.
If you are a prospective home buyer, you should make a note of these exemptions to benefit from them. Additionally, you should also follow up on pointers which can help you avail a home loan at the most beneficial terms and features.
Home loan eligibility and documentation
You can quickly calculate your home loan eligibility by checking whether you satisfy the following criteria. Note that applicants should be between 25 and 65 years of age. A CIBIL score of 750 and above can help individuals avail competitive interest rates as well as other beneficial loan terms and features.
Also, salaried applicants must have at least 3 years of working experience while self-employed individuals must showcase a business vintage of 5 years.
These are among the few things you must know before taking a home loan. Avail the tax benefits for substantial savings over the repayment tenor. Refer to lenders who provide not only attractive rates of interest but additional repayment-friendly terms and features as well.
7 Signs Your Business Face Financial Trouble
Within the last few decades, many companies, from high-profile mainstays to small local businesses, have fallen by the wayside. While some of those closures, administrations, and liquidations come seemingly out of the blue, there are somewhere in actuality the warning signs for the business were there before the final nail was driven in.
Listed below are seven key signs your business is in financial trouble.
Your Cash Flow Is Imbalanced
As the word goes, running a business, “cash is king.” An easy cash flow, where enough arrives to cover your outgoings, is key to keeping your organization operating. However, this flow could be sensitive, especially in small businesses. A supplier or customer perhaps not spending punctually may impact your cash flow, as may premature expansion or overspending in times wherever in actuality the going is good.
Negative cash flow is appropriate in the temporary while a fledgling company sees its legs or in the aftermath of an important expansion. But without positive cash flow, in the future, a small business cannot pay its costs and thus cannot survive. If your fund office is postponing spending its costs or team, it may indicate imbalanced cash flow.
Creditor Pressure Is Growing
The best way to help keep your creditors happy and minimize the pressure on your own company’s shoulders is to cover them on time. If your outgoings outnumber your income, it’s tempting to delay spending invoices. But doing this is just a sure-fire treatment for sour relationships along with your creditors, who may start chasing you for payment.
This may start the slippery slope into further trouble, as they’re likely to carry on chasing you until your debts are paid off. Creditors could even resort to legal action in an endeavor to retrieve their money, and you might wind up facing bailiff action.
You’re Always Refinancing
Refinancing alone isn’t an indication of financial trouble; it is a legitimate way of freeing up cash tied up in company assets by borrowing money secured against an assets’value. It can be used to lessen rates. While refinancing once isn’t abnormal, the business must manage to afford the repayments. If it occurs usually, it could be a sign of higher financial problems, and lenders may become cautious of companies continually refinancing, which may lead to more economic troubles later.
Until you are the main trader, staff are one of the very most vital the different parts of your organization, and employee morale often correlates along with your company’s health. One of the very obvious signs of financial trouble linked to staffing is layoffs and cutbacks in employee benefits, bonuses, or even a pay freeze.
The business could also change its contracts with staff, reduce hours, introduce zero-hour contracts or make staff work more for the same money. Doing so risks souring relationships along with your personnel and could cause to another location point.
Bad Company Atmosphere
Reducing advantages while increasing objectives on personnel will likely result in a bad environment and a drop in work satisfaction. Work can become less of a place of work and more of a place for fighting fires, constantly coping with problems instead of being productive. Team may lock onto that downturn and modify the atmosphere and start causing higher figures, too, taking people back to the last position about staffing issues.
Counting on Individual Contracts or Projects to ‘Sort It Out.’
Whenever a small business is operating healthily, it will have many clients or customers on the books with consistent income. Businesses in a less healthy position might put more weight on the agreements they do have. If one improvements company or stops being fully a regular source of business, the consequences will have an even more detrimental impact.
You could notice the company is relying more on fewer clients or focusing all of its efforts on acquiring new ones to the detriment of those they already have. This could sour relationships with existing customers and be described as a sign the directors are desperate for income.
Your Customers Have Noticed
Clients are very good at spotting when things change, and if they feel they’re getting less while paying the same money, they’re unlikely to stay quiet. If your employees are unhappy, prices suddenly rise, or benefits such as loyalty programs are scale back, rumors may start circulating, customers may start asking whether you’re closing, and in the worst-case scenario, it could get found by local or national media.