How property in a woman’s name can increase savings

We all know that buying a property is a big decision. When it comes to property purchase, an important aspect involves deciding on whether you would want to register the property on your name, or in the name of your spouse or your mother. Some states provide exemption for women buyers.

There are few concessions and exemptions you can avail when purchasing a property in the name of your wife or your mother.

Stamp Duty Concession

Many northern states offer partial concession in stamp duty if a woman purchases a property. Some amount of partial waiver is also applicable for joint registrations when the other party is a woman. The rate of concession differs by State. For instance, stamp duty charges in Delhi for women property buyers are 4% and 5% in case of joint registration. However, for men stamp duty charges are levied at 6%. This rate of concession can differ based on urban or rural areas within the same State.

Tax Exemptions and Rebate

As a woman property buyer, you can also enjoy several tax benefits and exemptions if you choose to apply for a home loan. However, there are certain conditions that need to be met to avail these benefits.

• For self-occupied properties, the maximum deduction towards interest is limited to Rs. 1.5 lakh per financial year.
• For rented out properties, the entire interest can be claimed for deduction against the net rental value.

Some banks offer a different interest rate for women who avail home loans. Although the interest might differ only by a fraction, it makes a significant difference in high-value home loans. This offer is applicable only if the woman is the sole applicant or the first joint applicant. Check with your respective lender to learn more.

There are also few points to consider, if you choose to buy a property in the name of your wife.

Tax Exemptions and Rebates

If you buy a property in the name of your wife, you will not be able to enjoy these tax benefits. This also holds true even if you are the co-applicant. This is because the loan is always given to the owner of the house.

Taxation

If your wife hasn’t monetarily contributed to buying of this property, even though she is the property owner, the rental income from this property will be treated as your own income and taxed appropriately.

Benami Transactions

Benami transactions are illegal. If you purchase a property using your own money, but register the property in the name of your wife, she becomes a “benami.” In order render this transaction legal, you will have to gift the money to your wife before she can purchase the property.

Although buying a property in your wife’s name sure sounds like a good idea, there are many things you will need to consider. The best way to enjoy maximum tax benefits and exemptions is to jointly buy a home. This way both can avail exemptions on tax.