Why One Should Invest In Real Estate?

How Real estate industry in India is evolving

The development of real estate industry is considered as an important parameter for measuring economic growth of a country and it is one of the most globally recognized sectors in India. The growth of the corporate sector specially the IT and ITES industry has also lead to the growth of the real estate sector due to the increasing demand for office space and subsequently urban and semi-urban accommodations. It is also indicated that this sector will draw NRI investments both in the short term and long term.

With growing population, the demand for homes in India is huge. Initiatives by the government like ‘Housing for All by 2022’ have demonstrated tremendous growth potential of the real estate sector. In addition, factors like emergence of nuclear families, rising household income and rapid urbanization have led to the growth of real estate industry that includes areas like residential, commercial and retail. It has been estimated that the Indian real estate industry has the potential to evolve from $120 billion in 2017 to about $650 billion industry by 2025.

As per the reports of IBEF January 2019, by 2030 the Indian real estate industry is expected to reach US $ 1 trillion. Due to this transformation, the sector’s contribution to GDP is also expected to go up from 7% at present to 13% in the future. So investing in real estate industry in India is justifiable.

Tax benefits

Tax authorities in India provide certain exemptions when real estate properties are bought on loans from specific financial institutions.

• Section 24: According to Section 24 of the Income Tax Act an individual is allowed a deduction, which is equal to the total interest payable on home loans from the taxable income of the same financial year. When an investor avails home loans, he or she would get a deduction of up to Rs. 1.5 lakhs on interest payable. However, the property need to be either constructed or bought within 3 years starting from the end of the financial year in which the loan was availed. The property also has to be self-occupied.
• Section 80C: As per Section 80C of the Income Tax Act, a deduction of up to Rs. 1,00,000 is available under section 80C (2) (XVIII) on repayment of principal amount during a particular financial year. The aforesaid amount also includes expenses such as registration fees, stamp duty, and others paid for transferring the property to the assessee. This deduction is made from Gross Total Income of the assessee.

Edelweiss financial service firm and home search

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Reema Sharma is a professional content writer specializing in blogging, press releases. I would like to share some knowledge by that Articles.