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Buy Your Second Home with Assured Rental Income

Investment in real estate has turned out more profitable than any other investment in long run, so people choose to buy more than one home. But, having multiple houses pinches you hard with Income Tax. We often focus on paying tax on our salary, deductions under section 80C, etc. and thereby simply neglect the house property income.If you invest wisely in properties that return high rental income, you can start minimizing the tax burden. CMRS Group offers you apartments at strategic location with high rental demand to ensure high rental income for years to come. 
Save More, Buy One More
CMRS Royal Orchid which is strategically located to generate a rental income of at least 18k/month starting from Dec, 2015 is available for 33 lacs. Lets assume that you take a loan of Rs 25,00,000 to buy an apartment with CMRS Group,  at an interest rate of 10% for 20 years, the EMI will be around Rs 24,125, which adds up to Rs 2,89,500 annually. Out of this, Rs 2,50,000 will go towards interest payment and the rest — Rs 39,500 —will be used for principal repayment. The buyer can avail a deduction of Rs 2,00,000 from his or her taxable income as the interest payment will be Rs 2,50,000 in the first year. This will enable the buyer to save Rs 61,800 from tax liability if his or her income is in the highest tax bracket of 30.9%. The net tax outgo after adjusting for the savings in tax will be only Rs 1,88,200.
Tax Saving Guide
Self-occupied properties and rented properties are treated differently for the purpose of income tax, you should understand the current rules to benefit from second home.
Self-occupied property
  • Annual value will be treated as Nil.
  • Principal part of home loan (up to Rs. 1.5 lakh under section 80C) and interest part (up to Rs. 2 lakh under section 24)
Rented property
There are multiple tax benefits/deductions for rented property
  • Taxes paid
  • 30 per cent standard deduction Interest part of home loan without any upper limit (Principal part doesn't qualify for deduction here).
  • Exempt from wealth tax if it is rented for more than 300 days in a year.
Tax Saving Tricks
  1. Buy home with highest rental income: You have the option of choosing one as self-occupied, you can even choose the one which you are not residing as self-occupied. You need to choose the one with highest rental income as self-occupied and the rest as rented. This is where choosing a property from CMRS Group at strategic locations will help you even if you never plan to live in that location.
  2. Register your home in spouse name: You should register your house in your spouse's name so that each one will have one property as self-occupied, for which there will not be any tax.
For any property advice, free legal advice and any other assistance while buying a property, feel free to call at  +91-7676-122-000 or send an mail to info@cmrsproperties.com
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