HOW TO SAVE TAX ON PURCHASE OF NEW PROPERTY/FLAT Tax Saving on Purchase of New Property/Flat: Deduction under Section 80C: You can claim a deduction of up to Rs. 1.5 lakh under Section 80C for the principal repayment of the home loan for the new flat. Deduction under Section 24: Section 24 allows a deduction of up to Rs. 2 lakh for the interest paid on a home loan for a self-occupied property. Deduction for First-Time Homebuyers (Section 80EEA): First-time homebuyers can claim an additional deduction of up to Rs. 1.5 lakh for interest paid on the home loan, subject to specified conditions. Joint Home Loan: If purchasing jointly, co-borrowers can individually claim deductions under Sections 80C and 24 based on their ownership share. Capital Gains Exemption (Section 54): If using the proceeds from the sale of a capital asset (like property) to purchase a new residential property, you can claim an exemption under Section 54. Settling Capital Gains Tax: Invest in Capital Gains Bonds (Section 54EC): Invest capital gains in specified bonds within six months to claim exemption. The maximum limit for such investment is Rs. 50 lakhs in a financial year. Purchase a Residential Property (Section 54): Utilize the proceeds from the sale of a property to buy or construct another residential property to claim exemption under Section 54. Invest in Equity Linked Savings Scheme (ELSS): ELSS investments can help in settling capital gains tax by offering deductions under Section 80C. Offset Capital Losses: Offset capital losses against capital gains. Losses can be carried forward for up to eight years. Pay Advance Tax: Pay advance tax on quarterly basis if you have earned capital gains during the financial year. Section 54 of Capital Gain: Limitations under Section 54: Investment in One Residential Property: Exemption is available only if the proceeds are invested in one residential property. Time Limit for Investment: New property must be purchased or constructed within two years from the date of sale. Value of New Property: Exemption is limited to the cost of the new residential property. Sale of New Property: If the new property is sold within three years, the exemption claimed earlier will be reversed. Holding Period: Original residential property must be held for at least two years to qualify as a long-term capital asset. It’s advisable to consult with a tax professional for personalized advice based on your specific situation. Tax laws are subject to change, and it’s crucial to stay updated with the latest amendments.