Buying a property is a big dream that any family man tries to realize at least once in his
lifetime. Property rules in different parts of India offer more benefits to woman buyers, making it obvious for a person to try buying the land or a house in the wife’s name. In India, it has become a common scenario where the wives are also working and some of them are tax liable too. Is there any respite from tax liability if the property is bought in the wife’s name?
Well, yes! So, let’s do a detailed study of benefits the female property buyers get to enjoy.
It would help you make suitable decisions at the right time.
Women empowerment is the hottest trend in the country at the present. All the Government policies and provisions are framed in order to make women stronger and financially secured.
Having a property in the wife’s name ensures financial security for her long after you are
gone or to protect her rights in case of any mishap or uncertain situations. Perhaps, this is the reason why ways are made tad bit easier, financially, for the female property buyers.
Here are some of the benefits that a female property owner enjoys.
Benefits pertaining to tax
Tax is one of the main issues that clamour the minds of home buyers. If the wife is a
taxpayer, she can enjoy additional deduction of up to 1.5 lakhs of rupees every year towards the payment of home loan. When both the husband and wife are working, then both can claim the tax benefits individually. The amount of tax benefit is proportionate to the share of ownership both of them enjoy.
Tax slabs for woman exempt larger amount of income when the earner is a female.
Stamp Duty burden becomes less
UP, Delhi, Rajasthan are some of the states that have extended relaxation in stamp duty
amount to female property buyers. While the male buyer is liable to pay 6%, and the couple 5%, the female buyers are given the opportunity to pay stamp duty at 4%. Thus, buying property in the wife’s name does help you save on the stamp duty amount. Jharkhand is the latest to announce unprecedented benefit to female buyers; here, it is proposed that she will be liable to pay only Re.1 as stamp duty.
Home loan at cheaper rate
Home buyers are always on a look out for ways to reduce expenditure on loans. Home buying is seen as a pretext to save tax and helps build wealth, in addition to having a place to call your own. Our taxation system is designed in a manner to promote investments in realty and infrastructure. In addition to encourage more moves from female property buyers, they are offered home loans at cheaper rates than males. A female buyer can get home loan at rate 0.05% cheaper than the male buyers. Experts report that a female buyer can get up to 30 lakhs of loan from State Bank of India at 8.50% as against a male who is sanctioned loan at 8.55% interest rate. The difference may look very small in terms of percentage, but makes a great impact on expenses if the loan availed is of a very large amount.
These are a few of the monetary benefits that a person can enjoy by buying the property in
wife’s name. If these fail to encourage you to take a call, then the facts that you can win her in style by booking property in her name may prompt you to do so. The idea of being labeled as promoter of women empowering soul and the one who loves and cares for the wife deeply is also exciting to go for the property in the name of the wife.
Facts you should know before buying property in the wife’s name
Buying a property, even in the name of wife, cannot be done blindly. There are certain
actions that can be deemed as case of tax evasion and may cause trouble in the long run.
For example:
1. The wife should have a source of income to buy the property. If the husband is
showing her assets as zero and absence of any source of income, then the property
is said to be the outcome of his income and thus, he cannot avoid tax.
2. If both husband and wife are earning and have pooled in their money to buy
property, then the rental income generated from such joint ownership will attract
tax for both the co-owners separately.
3. To get the property completely as per the legal framework, the husband has to show
that he has gifted money or paid money in exchange of the jewelry to help wife buy
the property. This actually does not provide any benefit on tax liability front and the
man is liable to pay wealth tax, etc. Name of wife cannot be used to buy property as
it can be deemed as means to park funds, something that amounts to Benaami
transaction. However, in case of money given in lieu of jewelry, the man may avoid
getting his income clubbed for buying the property in joint ownership with wife.
4. Wife can enjoy tax benefit only is she has separate source of income. Moreover, loan
companies or bank may refuse to sanction loan to the wife if there is no source of
income generated by her.
5. Buying a property in joint ownership with wife does not evade the possibility of legal
litigation against you. Both the owners will be equally answerable to legal situation,
if any, which arises from any dispute over property.
To conclude, in the present times, the Government is very particular about the clarity
of source of income and property titles. Hence, while buying a property, the buyer should have a clean and crisp record of the money that goes into buying the property.
Buying a property in the wife’s name is beneficial only when she has accountable source of income. Working couples looking for some relief in property buying expenses are the best lot to claim the deductions and to enjoy various monetary benefits associated with putting wife’s name as the property owner.
