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Residential Property

December 9, 2015

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Real Estate - Residential Property

Residential Property is a subset of real estate that is used for dwelling purpose or non commercial purpose. Purchasing a residential property is considered to be an investment these days and the returns of this type of investment are reasonably good.

Benefits of investing

The percentage of people investing in residential properties is increasing these days due to the following reasons :

Loans for purchasing properties are easily available
The principal paid while repaying one’s home loan is exempted from one’s taxable income under section 80C of Income Tax Act. The maximum exemption allowed is Rs.1.5 lac per year.
The value of residential properties appreciates over time.
One can also earn from the residential property by way of leasing or renting.
As per section 24 of Income Tax Act, the income out of a residential property can be reduced by the amount of interest paid on the loan availed for purchase, construction, renovation of a residential property. The maximum amount that can be reduced is Rs. 2 lacs per year.

Investing in residential properties is considered to be safe with probability of high returns. It is a preferred mode of investment for those who have a fairly low risk appetite.