In India, the age-old tradition of property ownership is undergoing a significant transformation, with an increasing number of women choosing to invest in real estate. Purchasing property in a woman’s name offers a multitude of benefits that extend far beyond the realm of gender equality. From substantial tax savings and lower interest rates to reduced stamp duty and enhanced financial security, this strategic move is not only financially prudent but also a safeguard against potential legal complications.
In this article, we will explore the compelling advantages of buying property in a woman’s name, shedding light on how this practice is empowering women economically and redefining the landscape of property ownership in India.
Advantages of purchasing property in a woman’s name
- Tax Benefits
When opting for joint ownership, both individuals can claim tax deductions under Section 80C from their taxable income, with the deduction amount determined by the ownership share. In the case of equal ownership, you can collectively avail of up to Rs 1.5 lakh annually on the principal amount of your home loan. Additionally, a joint deduction of up to Rs 2 lakh can be claimed on the home loan interest.
If the woman is the sole owner and a first-time buyer, she can also claim an additional Rs 50,000 for the principal of the housing loan under Section 80EE. Therefore, it’s advisable to consider the ownership structure to maximize your tax benefits.
- Lower Interest Rates
The pivotal factor when contemplating a home purchase is the interest rate on home loans. If your wife has a source of income, she can secure a home loan with interest rate discounts specially tailored for women. Most banks offer a discount of up to 1% for female applicants, although the percentage may vary from one bank to another. Additionally, exploring government schemes such as Pradhan Mantri Awas Yojna (PMAY) can lead to a subsidy of 6.5% for a 20-year term.
- Reduced Stamp Duty
Stamp duty is often the most substantial expense for a homebuyer, second only to the property’s actual cost. Typically around 4% of the house’s total value, the government extends concessions of up to 2% on stamp duty for women. While the percentage may seem modest, in absolute terms, it can amount to a significant sum. The specific discount depends on the property’s location.
- Deductions on Rental Income
For those renting out their property, it’s worth noting that tax deductions can be claimed on rental income. Women, in particular, can benefit from interest deductions on loans taken against rental income, in addition to the standard 30% deductions on rental income.
- Financial Security
Purchasing a home in a woman’s name is a prudent financial move. In the event of bankruptcy or debt, your home can typically be seized to recover losses since it is a significant asset. However, if the property is registered in your wife’s name, it is generally protected from creditors or government officials, provided she is not a guarantor or co-owner of any loans held by her husband.
- Simplified Succession
In cases of co-ownership, succession matters are easily resolved. If one of the co-owners passes away unexpectedly, the surviving partner automatically becomes the sole owner of the property. This eliminates the need for legal disputes over succession, saving you both time and money on legal proceedings.
Conclusion
In summary, purchasing property under a woman’s name in India offers numerous advantages. These include reduced interest rates, tax benefits, enhanced financial independence, and improved estate planning. Women who own property in their name are well-positioned to effectively handle their finances, grow their assets, and safeguard their financial well-being. Whether you’re a young woman embarking on your financial journey or an older woman seeking to secure your financial future, acquiring property in your name is a wise and empowering choice.
