IS IT A WISE DECISION TO TAKE LOAN FROM BANK AND TO PURCHASE A LAND OR HOUSE?

CONFUSION IS BECAUSE OF REPAYMENT RISK,HUGE AMOUNT OF INTEREST AND THE GOVERNMENT TAXES ETC, COMPERATIVELY THE RENTED HOME IS BEST

looking at the present trend buying a propertyon loanhas is advantages

with the increase in house property prices it is better to buy taking a loan

you create an asset

the interest on loan repaid during the year can be taken as loss from house property and adj against other income

the principal amount of the emi of the year avilable for deduction u/s 80C of the income tax act

if you are capable of paying the instalments it is wise to take a loan and purchase house or land .

Purchasing A LAND OR HOUSE is creating an asset (investment).

If you pay monthly EMI, your repaying the principal amount is like putting money in a RD (saving). Also the value of the asset keeps appreciating. You become owner of a house.

If you pay monthly rent, you keep spending but create nothing.

I paid Rs 3500/- EMI + Rs 950/- (maintenance) for my house purchased in 2000. I received rent Rs 4500/- from tenant.

Purchase price - Rs 6 L

Loan amount - Rs 4.5 L

Built-up area - 560 sq ft

If 'Income from HP' is declared the additional IT would amount to about Rs 3000/- annually.

'Income from HP' is declared only in case house is rented out. Otherwise you pay only Property Tax.

Who is wise, owner or tenant??

HMT

Great analysis by HMT