Owning a home is a big milestone, and for women, it can be a crucial step towards financial independence. One of the incentives offered to encourage women to invest in real estate is the lower stamp duty on property purchases. This benefit can lead to substantial savings and make homeownership more accessible for women.
What Is Stamp Duty?
Stamp duty is a tax which is collected by the government on the sale of property. It is charged as a percentage of the property’s value and is normally paid by the buyer at the time of registration. The rate varies on the basis of various factors, and also on whether or not the buyer is a woman. Most states waive off the stamp duty for women to encourage them to be owners of property.
How Women Can Benefit from Lower Stamp Duty
Stamp duty reduction can potentially lower the upfront cost of purchasing a property. Even the smallest difference in percentage can be quite significant, especially when it comes to urban areas where real estate prices are high. For instance, if stamp duty for men is 6 per cent and for women it is 4 per cent, so, on a property of Rs 50 lakh, the savings will be Rs 1 lakh.
This can make homeownership more accessible and the savings from the deal could be used to pay for interior work, lawyer fees, or loan repayments. However, it must be noted that the stamp rates for women vary from state to state.
Promoting Financial Freedom
For women, it can become relatively easier to purchase properties with reduced stamp duty rates, thus financially empowering them. They can have increased asset ownership as well as higher financial security and stability with increased home ownership. Access to credit may also increase through property ownership since most of the financial institutions use real estate assets as collateral in considering loan applications.
Reduced stamp duty encourages women to invest in real estate for personal use or as an investment. Financial institutions also offer low-interest home loans for women, making the cost of owning homes even lower. These benefits make property investment viable for women seeking long-term financial growth.
Tax Benefits
Women, who own the property, can also claim extra tax relief. If they have taken a home loan, they can deduct the principal and interest amount from their taxable income.
The Income Tax Act, 1961 states some of the tax benefits, such as, under Section 80C, deduction of up to Rs 1.5 lakh on the principal repayment of a home loan is available. Section 24(b) provides a deduction of up to Rs 2 lakh on interest paid on a home loan for a self-occupied property. Under Section 80EEA of the Income Tax Act, an additional deduction of up to Rs 1.5 lakh can be obtained on interest paid on a home loan for first-time homebuyers purchasing an affordable house.
These benefits are available only under the old tax regime since no deductions apart from standard deduction are offered under the new tax regime.
Procedure To Purchase Property With Reduced Stamp Duty
Women are required to validate whether their property is registered in their name or not, from which they could enjoy the decreased stamp duty. The process includes: checking the existing stamp duty rates listed in order based on the current prevailing rates, ensuring that the deal purchasing agreement contains her name as its owner, submission for registration to authorities concerned, pre-purchase Issues, etc.
Even though the stamp duty for women is lower, you should check all the boxes for location, eligibility for a loan, resale value, and other legal issues before buying the property. It is always advisable to consult a financial advisor or real estate expert. Paying less stamp duty on an investment in property is an economic benefit for women which can not only provide a relatively more economic purchase but also financial independence with long-term creation of wealth.
