On February 1, the first Union budget after the demonetization was announced. It comes as a huge relief for middle income tax payers. The impact of demonetization has had a good effect on the country’s economy. The tax proposals that were announced by Finance Minister Arun Jaitley are as follows:
- Under the Section 80c of Income Tax Act of India, the people who earn Rs.3.5 lakh per year will pay reduced tax. This is reduced from Rs. 5,150 to Rs.2,575.
- People who have a taxable income from Rs. 5 lakh and Rs. 50 lakh will get relief. They will have to pay Rs. 12,875 less than what they have been paying earlier.
- If you're someone who has a taxable income of more than Rs. 50 lakhs but not more than Rs. 1 crore will have to pay the government a surcharge of 10% on the total taxable amount.
- But, people who have a taxable income of more than Rs. 1 crore won't receive any benefits. If you are someone who falls in this category, you will need to pay Rs. 12, 875 less but the surcharge of 15% will still remain the same. This is to ensure the government gets a sizable revenue from income tax for expenditure.
Tax Benefit Reduced on Rented Property According to the Union Budget 2017
The Union Budget of the year 2017 has curbed the tax rebate on Home Loans. It is applicable for properties that are deemed to be rented out. It’s not at all good for people who earns through rental income.
In case of a Home Loan, normally the below mentioned benefits are provided for the borrower. When you have a house that is deemed rented, you get tax benefits on 30% of the rental income. This is a standard deduction along with the tax paid on municipality and Home Loan interest you have paid. When all deductions get added, the rental income ends up being negative. This is referred to as loss of house property. Now the taxpayer will save on the total income tax which needs to be paid on rental income along with total income.
What is Home Loan Balance Transfer?
Home Loan Balance Transfer is the process of transferring your present Home Loan from one bank to another. The Balance Transfer on Home Loan is possible only when the total principal loan amount is transferred to the other bank for a lower interest rate. If you have been making regular payments of EMIs, you become more eligible for Home Loan balance transfer. In India, most banks have this facility of Home Loan Balance Transfer. This makes it easy for both borrowers and banks.
Benefits of Home Loan Balance Transfer
- You will get attractive Home Loan rates on interest. This can make your Home Loan that much more affordable.
- You can get customised options on repayment methods that suit your needs.
- Documentation process is pretty simple for almost all banks.
- You won't find any hidden charges in this process of Home Loan balance transfer. But there can be a processing fee and convenience charge.
- Some banks or financial institutions provide expert advice on legal matters. This allows you to take an informed decision for paying off your loan.
- Buying a home is a big deal, and with all the new tax breaks and benefits, the process has been made a lot simpler than before.