Neha Nagar Instagram – The Hidden Tax Burden of Buying a Home: Tax Series Part 1
When purchasing a house, buyers often focus on the property’s price tag. but, the actual cost can be significantly higher due to various taxes imposed by the government. Let’s break down the tax burden using the example of buying a 2 crore rupee flat in Delhi:
1. Income Tax
Income Tax: Approximately 69 lakh rupees (34.5% of the property value)
2. Property Purchase Taxes
Once you have the money, buying the property incurs additional taxes:
Goods and Services Tax (GST): 5% = 10 lakh rupees
Stamp Duty: 6% = 12 lakh rupees
Tax Deducted at Source (TDS): 1% = 2 lakh rupees
Registration Charges: 1% = 2 lakh rupees
Total taxes on purchase: 26 lakh rupees (13% of the property value)
3. Future Sale Taxes
If you decide to sell the property in the future:
Long Term Capital Gains Tax: 12.5%
The Bottom Line
To buy a 2 crore rupee house:
Total taxes paid: 95 lakh rupees (47.5% of the property value)
This means that nearly half of what you pay goes directly to the government in various forms of taxation. The government benefits significantly from property transactions, collecting taxes at multiple stages of the process. Do you think the government needs to lower the taxes?
PS: We are starting a new series related to tax that saves you a lot of money, follow me for that! | Posted on 05/Sep/2024 21:36:36
