Nowadays, many homebuyers prefer ready-to-move apartments or flats on which they can avail ready possession. These properties offer various advantages like zero waiting period, immediate occupancy, ready-to-use amenities, rent savings, etc. Yet, the most remarkable perks of buying a ready possession property are the tax benefits you can avail on it. So, although ready-to-move flats may seem more expensive than under-construction ones, you actually end up saving a lot more on the former's overall cost.

Read on to learn about the different tax advantages you get on purchasing ready-possession homes in India:

What are the Tax Benefits on Ready-Possession Properties?

• Benefits on Home Loan Interest

  Under the Income Tax Act's Section 24(b), homebuyers can get a tax deduction of up to ₹ 2 lakhs per year on the home loan interest for their first house purchase. This tax benefit exclusively applies to ready-possession and self-occupied flats. However, in case you rent or lease out the property instead of occupying it yourself, the deduction amount has no limit. Therefore, you can claim tax benefits on the entire loan interest amount that you pay!

  Ready-to-move homes may offer about 85% more tax savings as compared to under-construction properties. This is because with the latter, you can get the home loan interest tax deduction of up to ₹ 2 lakhs per year only if the construction is complete within 5 years from when the loan was initiated. If the project is not completed within 5 years, then you may get a tax benefit of just ₹ 30,000.

  Additionally, while the tax deduction on a ready possession property is available instantly, it is not so with under-construction homes. When you buy an under-construction property, you cannot claim the deduction on the total loan interest amount all at once. You get it only post-possession and that too in five instalments disbursed over a duration of five years from the possession date. In this scenario, it is easy to see why ready-possession properties have become such an attractive option for buyers.

• Benefits on Principal Amount Repayment

  Under the Income Tax Act's Section 80C, buyers can claim a tax deduction of up to ₹ 1.5 lakhs per year on the repayment of the home loan's principal amount. The principal amount is the core sum that the buyer has borrowed from the bank or lender, not including the interest, processing fees, and other additional charges. This tax benefit applies only to a ready possession property whose construction is finished, like for instance, any K Raheja project in Mumbai be it Raheja Residency, Goregaon-Malad East or Raheja Interface Heights, Malad West. It is not applicable on under-construction projects.

• Faster Capital Gains Tax Exemption

  Under the Income Tax Act's Section 54, you can get exemption on the long-term capital gains tax on the sale of a property that you have held for more than two years. This tax benefit applies only if you reinvest in another property one year before or two years after selling the old one.

  If the new property you buy is ready-to-move (such as a luxury apartment in Mumbai by K Raheja Realty), you can avail the capital gains tax exemption more quickly since there is no waiting time for acquisition. On the contrary, if the new property that you have purchased is still under construction, the project should be completed within three years of the sale of the old property. In the event that the possession takes more than three years, it may invalidate your capital gains tax exemption.

• No Goods & Services Tax Applicable

  Under Schedule II, Section 5(b) of the CGST Act of 2017, the Goods and Services Tax (GST) does not apply to the purchase of a ready possession property that has received the Occupancy Certificate (OC) or the Completion Certificate (CC) from the local municipal authorities. This is because the law considers this transaction to be the sale of an immovable property. Hence, it comes outside the scope of taxable supply.

K Raheja Realty's Ready-Possession Homes in Mumbai

If you wish to buy a ready-to-move luxury apartment in Mumbai to avail the above tax benefits, K Raheja Realty's residential projects are a splendid choice. You can choose from among 1, 2, 3, and 4BHK flats across these ready-possession properties. These OC-received K Raheja homes are spacious, bright, airy, and well-designed with premium features. They offer scenic views and access to several lifestyle amenities and location perks.

• Raheja Residency, Goregaon-Malad East:Tower 'T' at Raheja Residency in Goregaon-Malad East offers 1 BHK flats, whereas Tower 'S' in the same complex has 2, 3, and 4 BHK flats. The project includes 20+ lifestyle amenities, such as the Podium Dream Garden (2 acres approx.), resort-style swimming pool amidst breathtaking landscape, extravagant 20,000 sq. ft. clubhouse (OC-received), well-equipped gym, pickleball court, kids' play area, banquet hall, 4-level car parking space (stilt + 3 basement levels), etc.
• Raheja Interface Heights, Malad West:You’ll find premium 2 and 3 BHK flats at Raheja Interface Heights in Malad West. This project also has 20+ lifestyle amenities, including a clubhouse, banquet hall, swimming pool, well-equipped gym, indoor play area, podium garden, restaurant, etc.

Both Raheja projects have exceptional connectivity due to the metro, Western Express Highway, and the local railway station’s proximity. These addresses are also near some of the finest hospitals, schools, colleges, commercial hubs, and retail spaces. The upcoming Goregaon-Mulund Link Road and the proposed Coastal Road project will make the Malad-Goregaon region even more well-connected in the next few years!

Conclusion

These were the different tax benefits of buying a ready possession property. Contact K Raheja Realty’s sales office today to explore our ready-to-move projects in Mumbai!

Disclaimer

The content of this blog is based on information available to the public for general use, and any references/sources if mentioned. While we take care to refer to reliable sources as far as possible, we do not claim any responsibility for the accuracy of the given information whatsoever. The article is to be used for general informational purposes only. Please note that it neither constitutes legal advice nor does it intend to. If any individual(s) take/s any decision based on the information in this article without verifying the genuineness of the facts, we expressly disown/disclaim any potential liability that may result due to the same. We encourage readers to get guidance separately pertaining to any specific information given herein.