Income tax benefits on investment options: Mutual Funds vs Real Estate. Which is better?

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tax benefits of investing in mutual funds and real estate. As per Section 80C of the Income Tax Act, equity-linked savings scheme investments are qualified for the deduction up to a limit of a maximum amount of ₹1.5 lakh each fiscal year. "Gains from equities mutual funds that have been held for more than a year are regarded as a long-term therefore are now tax-free up to ₹1 lakh.

Any gains in excess of one lakh rupees are subject to tax at 10% without indexation. Furthermore, there isn't any Dividend Distribution Tax (DDT on equity mutual funds; nonetheless, investors may be required to shell out tax upon dividend earnings based on their tax bracket," said Amit Gupta, MD, SAG Infotech Profits from the sale of real estate are usually taxed as capital gains. “However, in certain countries, exemptions or lower rates may be available for principal residences or properties kept for a specific amount of time," said Suren Goyal, partner, ofRPS Group.

A home loan provides a number of benefits upon repayment through tax deductions under the Income Tax Act of 1961. A home loan repayment consists of two parts: the principal amount and the interest paid on the amount borrowed. Under Section 80C and 24(b) of the Income Tax Act of 1961, you are eligible to get tax advantages on each of these categories.

“Deductions for home loan principle and interest payments may still be possible for self-occupied houses under Sections 24(b) and 80C, although the limitations and restrictions may have changed since my previous update. Long-term and short-term capital gains from real estate may still be taxed according to the same broad principles as previously explained, but tax rates and exemptions may alter," said Suren Goyal. As per Ashish