Tax Benefits You Can Avail by Investing in Apartments in Kochi

Posted onMay 17, 2025

Real estate offers financial growth and stability, making it a preferred avenue of investment for many people. There are also significant tax benefits to be enjoyed on this, from deductions on home loans to capital gains tax exemptions. Along with wealth building, you should also make tax savings a part of your real estate investment strategies in Kochi. 

Tax benefit under Section 80C

Most people avail home loans to purchase property. When you repay the principal, you can claim tax benefits under Section 80C of the Income Tax Act of 1961. You can also claim deduction on expenses like the stamp duty and registration fees you pay at the time of purchase.

However, there is a maximum limit for such deductions, which is currently at 1.5 lakh rupees. If you fall into the 30% income tax bracket, you can save up to Rs. 45,000, provided you choose the old regime at the time of filing your IT returns. This deduction is not available under the new regime.

There is a rider as well: you can claim the deduction under Section 80 C if you don’t sell the property within the next 5 years; in the event you do sell, the tax benefit you availed in the previous financial years will be reversed.

If there is a co-applicant on the home loan of your spouse, sibling, parent, or partner, both of you can enjoy tax benefits under this section. When both spouses are earning and apply for the loan jointly, you can decrease your total tax liability.

Tax benefit under Section 24(b)

This section deals with tax exemption on the interest paid towards the home loan repayment. Here, you can claim deductions up to Rs. 2 lakhs on the interest segment of your loan.

Section 24(b) also allows you to claim tax exemptions on the interest paid for home loans if you have purchased an under-construction property, after completing construction, and within five equal instalments from the time of completion. You need to keep in mind however, that once you avail the loan, the construction must be completed within the next five years, for you to claim this exemption.

Here too, having a co-applicant on your home loan helps, as your co-applicant can also claim exemption, raising the limit to Rs. 4 lakhs.

Section 80EE First-time Homebuyers Deduction

If you’re a first-time homebuyer, you can claim an additional deduction of Rs. 50,000 under Section 80EE. This deduction can be claimed by individuals who meet specific criteria like property value cap, loan amounts, etc., making it an invaluable avenue for saving tax. This is a great way for you to save on additional tax on real estate in Kochi.

Tax Benefits On Second Home Investment

When you purchase a second home, it is usually rented out so that you can earn an income from it. You can avail the same tax benefits during loan repayment, under Sections 80C and 24(b), of course, but you can also offset your rental income against the interest on the home loans to get even more tax exemption. This way, a second property can help you to enjoy greater tax savings.

Under Section 24(a), you can also claim exemption of up to 30% on your rental income to cover cost of maintenance etc. to reduce tax liability.

Benefits Under Section 54 Capital Gains Exemption

If you sell your property and make a profit, then it is subject to taxation. However, if you invest the entire proceeds in another property or in specific Government bonds, you will not have to pay tax. This investment must be made one year prior to the sale, within two years after the sale, or within three years of the sale if you are constructing your own house.

You should have had ownership of the property for a minimum of two years for it to be deemed a long-term capital asset. This exemption offers a huge relief for long-term investors, so that they can reinvest and avoid or minimize tax payment and maximize returns.

Conclusion

Tax liabilities and deductions are some of the most important things to consider when buying an apartment. Though there are others, you don’t have to worry about any of that when you purchase a Varma Homes flat. Featuring excellent construction, aesthetic appeal, intelligent design, innovative amenities, and RERA certification, Varma Homes apartments in the best localities in Kochi, are a delight for any homeowner.

Thinking of getting your own place? Turns out, buying Apartments in Kochi isn’t just about having a cool home it also helps you save big on taxes! Why wait? 

FAQs

What are the main tax benefits of buying apartments in Kochi?
When you invest in apartments in Kochi, you can claim deductions under Section 80C (principal repayment, stamp duty), Section 24(b) (home loan interest), and Section 80EE (for first-time buyers). You may also get capital gains exemptions under Section 54 when reinvesting.

Can I claim tax benefits if I buy an under-construction apartment in Kochi?
Yes. Under Section 24(b), you can claim interest deductions up to ₹2 lakhs after possession spread over five years if construction is completed within 5 years from the end of the financial year in which the loan was taken.

Can both co-applicants get tax benefits on a joint home loan?
Absolutely! If both co-owners are co-borrowers and contribute to loan repayment, each can claim deductions under Sections 80C and 24(b), doubling your tax-saving potential.