2. Benefit on Buying House Property value is appreciating Property can be pledged to take loan latter Pride of owning a house Tax is saved on principal & interest Rental income possible post retirement
3. Tax benefit Under Housing Loan Tax Benefit on Principal (Amount Exempted)= Rs 100000 @30% Tax Benefit on Interest (Amount Exempted) = 150000 @30% Under Rent 40% of Basic Salary / HRA / Rent Paid in IN EXCESS OF 10 % basic - which ever is lowest 50% of basic in case of metros
4. Benefit on Rented House Amount saved can be invested at higher returns Better life style, flexibility to spend and save. Can switch to better locality and larger house based on salary increase Tax saved on rent expense Can buy house on down payment latter No maintenance cost There can be savings on difference between actual rent and HRA
5.
6. Assumptions House bought for own occupation Amount saved are reinvested at market returns Profile considered is that of a salaried employee Down payment made for acquiring the house is not considered as it may be equal to deposit for the rented house
7. Assumptions… Rent increase is not considered. Neither is the cost of increase in maintenance and increase in HRA. As these can be considered to be negated against each other Interest rate risk is not considered Market return risk is not considered as the terms (10 years , 15 years) are sufficiently long Salary structure is considered to be flexible for tax planning
