4 unique ways to save taxes on your real estate investment

financialexpress.com:

Real estate, despite its inherent cumbersome nature, is one of the most popular investments in India. Since the basic investment for real estate is often high, the taxes associated with it also tend to be steep. However, smart planning can go a long way in bringing down the overall tax outgo on real estate to a bare minimum.

Until Real Estate Investment Trusts (REITs), real estate investment sans a home loan was out of the reach of most middle-class investors. With REITs, one can invest in real estate for as low as Rs 10,000. REITs pool funds from multiple investors to finance income-generating commercial properties. Though investors technically don’t ‘own’ the properties, they have a right to the income generated from such a property. With REITs, a retail investor need not pay registration charges and property tax but can still stay invested in real estate.

REIT units are tradeable on the stock exchange, and gains from their sale attract Short Term Capital Gains (STCG) or Long Term Capital Gains (LTCG). To avoid tax on the sale of REIT units, investors can sell a limited number of units at a time after a certain period to ensure the overall LTCG is less than Rs 1 lakh. This is a big advantage of REITs, unlike brick-and-mortar properties that cannot be sold as piecemeal units (one cannot sell or buy one room of a house at a time!).

Also Read: 6 effective ways to track your expenses

Another way to avoid shelling out big money for tax is to opt for a read-to-move-in property. At present buyers of ready-to-move-in properties that have got an Occupancy Certificate don’t need to pay GST. However, it should be noted that ready-to-move-in properties cost much more than under-construction ones but overall the risk is low as a