WOMEN IN THE HEART & ON THE NAME PLATE
Benefits of being a Woman Home Buyer in India
More and more women in India are becoming financially independent. They are taking their rightful place as equals in the society, participating & making important decisions such as buying their own house.
As per the latest consumer survey by ANAROCK-LIC Housing Finance, 77% of women home seekers are looking to buy property for end-use, while the rest are looking at the same as an investment.
To make house purchases more profitable for women while fulfilling its larger goal of ‘Housing for All’ the Indian government offers several monetary benefits that women home buyers in India can avail of, if the property is registered in their name.
1. Stamp duty
The stamp duty on homes registered in the name of women is about 1%-2% lower as compared to men in most Indian states. E.g., if a woman purchases a property worth Rs. 50 Lakhs, she saves around Rs. 50,000 – 1, 00,000 on stamp duty, all the credit for this goes to the lower stamp duty scheme for women.
The stamp duty that in India for when a man pays v/s when a woman pays
| State | The stamp duty rate for men | The stamp duty rate for women |
|---|---|---|
| Jharkhand | 7% | Re 1 |
| Delhi | 6% | 4% |
| Haryana | 6% in rural, 8% in urban | 4% in rural, 6% in urban |
| Uttar Pradesh | 7% | Rebate of Rs 10,000 on overall charges |
| Rajasthan | 5% | 4% |
| Punjab | 6% | 4% |
| Maharashtra | 6% | 6% |
| Tamil Nadu | 7% | 7% |
| West Bengal | 5% in rural, 6% in urban, (Plus 1%, if the property cost is more than Rs 40 Lakhs) | Same |
| Karnataka | 5.6% | 5.6% |
2. Home Loan Benefits for Women
Did you know?
Women are the favoured applicants for a home loan. They are known for having a better track record. Lenders find them more reliable, hence a woman’s chances of being approved for a home loan are higher.
Financial lending institutions are encouraging home buying behaviour amongst women by offering specialised schemes and lower interest rates.
Even a minimum subsidy of 0.05% to 1% on home loan rates significantly impacts EMI. It adds up to a considerable amount in lowering down the EMI, thus making repayment stress free for women.
Here’s how much a women applicant can save on a home loan at a lower rate of interest as compared to others:
| Particulars | Women Borrower | Other Borrower |
|---|---|---|
| Loan Amount | 50 Lakh | 50 Lakh |
| Rate | 8.30% | 8.35% |
| Rate Difference | 0.05% | |
| Tenure | 20 years | 20 years |
| Monthly instalment | 42,760 | 42,918 |
| Total Principal Amount | 50,00,000 | 50,00,000 |
| Total Interest Amount | 52,62,482 | 53,00,234 |
| Total Amount Payable | 1,02,62,482 | 1,03,00,234 |
| Amount saved | 37,752 |
2.   A. Women can choose longer tenure
2.   B. Women can benefit as co-borrowers
Women can apply as co-borrowers with their spouses. Their combined income can offer them higher loan eligibility. Furthermore, as co-borrowers, they can claim tax benefits of Rs 1.5 lakh on the principal amount under Section 80C and Rs 2 lakh on the interest repayment. By availing of a joint home loan, a couple can claim the benefit which is a combined deduction of Rs 3 lakh on the principal amount and Rs 4 lakh on the interest component.
To understand more you can refer to the illustration below:
| Particulars | Home loan tax benefits for Individuals | Home loan tax benefit for Couples* |
|---|---|---|
| Principal under Sec 80 C | Rs. 1,50,000 | Rs. 3,00,000 |
| Interest under Section 24 | Rs. 2,00,000 | Rs. 4,00,000 |
| Total Deductible | Rs. 3,50,000 | Rs. 7,00,000 |
However, the couple should ensure that the sale deed/conveyance deed has the names of both the applicants as the owner of the property and women to be the main applicant.
2.   C. Women can avail higher loan amounts
Many lenders are increasing their sanctions to attract women borrowers. Benefiting from this, women can avail higher loan amounts from anywhere between Rs. 30 Lakhs to 3.5 Crore. This complemented with simple eligibility criteria, it’s a big ‘YES’ to be a woman home buyer in India.
3. Tax Deduction Benefits
Women can also avail tax benefits while taking a home loan. The limit is up to 3.5 lakhs covered under section 80 C for Principal repayment and Section 24 (b) on Interest paid. As per the Income-tax Act 1961, the borrowers can claim a deduction of up to Rs 1.5 lakhs under section 80 C and can claim a deduction of up to Rs 2 lakhs under section 24 (b).
Over & above the deduction of 24 (b), women can claim an additional deduction of Rs 1.5 Lakhs under section 80 EEA. This is only applicable to the loans sanctioned from 1st April 2019 to 31st March 2021.
| Section | Tax deduction applicable on | Limit |
|---|---|---|
| 80C | Principle Paid | Up to Rs. 1.5 Lakhs |
| 80C | Stamp Duty | Rs. 1.5 Lakhs |
| 24(b) | Interest Paid | Up to Rs. 2 Lakhs |
4. Pradhan Mantri Awas Yojana benefits for women
As a step towards equality, and to empower women of all ages, classes, and marital status to apply for housing loans without facing any discrimination, the government has introduced the Pradhan Mantri Awas Yojana (PMAY) Scheme.
Under this scheme, a woman borrowing a home loan under Pradhan Mantri Awas Yojana Credit-Linked Subsidy Scheme (PMAY-CLSS) enjoy concessions on interest. Women borrowers from the economically weaker section (those earning up to Rs 3 lakhs per annum) and low-income group (LIG) category can avail of an interest subsidy of 6.5% (up to Rs 2.67 lakhs) on housing loans of up to Rs 6 lakhs. The subsidy amount is given upfront on the principal outstanding, thus lowering down the interest amount.
The benefits under PMAY-CLSS scheme are categorised on the basic income:
| Income Groups | Eligible Family Income |
|---|---|
| Economically Weaker Sections (EWS) | Up to Rs. 3 Lakhs |
| Lower Income Group (LIG) | Rs. 3,00,000 to Rs. 6,00,000 |
| Middle Income Group 1 (MIG 1) | Rs. 6,00,001 to Rs. 12,00,000 |
| Middle Income Group 2 (MIG 2) | Rs. 12,00,001 to Rs. 18,00,000 |
To avail of the benefits of the PMAY-CLSS scheme, women must meet the below guidelines:
- At least one woman in the family must be registered as the owner of the new property, irrespective of the fact whether she is buying the property or not
- Neither the woman, nor her immediate family should own a ‘pucca’ house anywhere in India. (You qualify, even if your parents own a home and you live with them)
Other Benefits under Pradhan Mantri Awas Yojana Scheme:
| Particulars | EWS | LIG | MIG 1 | MIG 2 |
|---|---|---|---|---|
| Annual Income | Rs 3 Lakh | Rs 3 lakh to Rs 6 lakh | Rs 6 lakh to Rs 12 lakh | Rs 12 lakh to Rs 18 lakh |
| Repayment Tenor (in years) | 20 years | 20 years | 20 years | 20 years |
| Subsidy Interest | 6.5% | 6.5% | 4% | 3% |
| Loan amount for subsidy qualification | Rs. 6 lakh | Rs. 6 lakh | Rs. 9 lakh | Rs. 12 lakh |
| Max. Property Carpet Area | 30 square meters | 60 square meters | 120 square meters | 160 square meters |
All the above-mentioned benefits add wings to a woman’s dreams of owning a home. They go a long way to empower women both financially and economically.