Know How to Avail Tax Benefits on your Property

In India property is deemed as a source of income. Thus tax is imposed on property. Gharonda Builders have pointed out few factors that are considered during tax evaluation in India.

Property taxes differ from state to state. Different civic bodies bring about different methods to calculate tax. However, the general overview of tax calculations remains the similar. 

Assessment of the property is first carried out by determining:

-       Location

-       Occupancy status (whether it’s rented out or self-occupied)

-       Amenities provided (rainwater harvesting, car park, store, etc.)

-       Type of property (commercial, residential or land)

-       Type and the year of construction.

-       Carpeted square area and floor space index and of the property.

After determining the above parameters, civic agency can use a formula it deems fit to calculate tax. Different formulae are used by different agencies.

Ways to minimize tax on property

1.   Research neighboring properties

Information about your property is typically present in the local database. What people don’t realize is that information about other properties is also accessible. Evaluate taxes on houses that are comparable to yours. You can end up finding inconsistencies that could lower your taxes.

2.   Reinvest in another property

 If you want to save tax on the capital gained from selling a property, invest all the money in another property. This can happen only in case of a residential property and not a commercial one.

3.   Know the tax rules

Without knowing tax rules of your city, you cannot figure out if you’re missing a chance to avail tax benefits on your property. A good real estate agent or company can help you out with the nitty-gritty of property tax rules.

Real estate is a complicated world, you cannot be aware of everything that matters. Contact property experts, Gharonda Builders and Developers, for free consultation and advice regarding your real estate issues.