We list some of the monetary benefits that women homebuyers in India can avail of if the property is registered in their name
With an aim to increase property ownership among women, the Indian government has put in place several measures to make house purchases more profitable for them. Listed below are some of the monetary benefits that women homebuyers in India can avail of if the property is registered in their name.
Lower stamp duty for women
Most Indian states charge a lower stamp duty (the charge that the buyer has to pay, in order to get the property registered in the government’s records) if the property is registered in the name of a woman. For example, in the national capital of Delhi, women buyers only pay 4% of the property value as stamp duty, as compared to 6% payable by men. In Mumbai, too, women pay only 5% of the deal value as stamp duty, while the rate for men is 6%. States like Jharkhand and Jammu have gone a step ahead, by waiving stamp duty on property purchases by women. Jharkhand charges a token Re 1 on such transactions.
In Uttar Pradesh, women are offered a 1% reduction in stamp duty charges. This reduction, however, is applicable only up to Rs 10 lakhs, out of the total value of the transaction.
In Himachal Pradesh, there is a two percentage points difference – 4% for women and 6% for men – in rates, if a property is registered in the name of a woman. In the case of joint ownership, the stamp duty will be 5%.
Home loan interest rates for women
A majority of homebuyers in India rely on housing finance, to buy properties. While this credit enables consumers to own properties in the early years of their working life, it also increases the overall cost of the purchase. Women, however, do not have to spend as much as men, as several banks offer home loans to women at lower interest rates. Typically, home loans meant for women are priced 50-100 basis points lower than the average rate. (A 100 basis point makes up for one percentage point.)
If a woman were to take a home loan from the country’s biggest lender, State Bank of India (SBI) at present, they would have to pay only 6.80% interest, if the loan size is up to Rs 30 lakhs. On the other hand, the effective rate for men is 7%. For a similar loan amount, housing finance company HDFC currently charges 6.90% from women borrowers. For men, on the other hand, the interest rate may be higher per annum.
Someone paying an interest of 7% on a loan of Rs 30 lakhs for 20 years, would ultimately pay around Rs 55,95,125. In case the loan is priced at 7.2%, the overall loan liability would be Rs 56,68,915. Even though the difference might not seem substantial, any saving is better than no savings at all.
Tax benefits for women property buyers
In case a property is jointly owned by a man and his wife, she would have to become a co-applicant in the home loan application. A benefit of this would be that both the spouses will be able to claim tax deductions on their individual incomes, under Section 80C, Section 24 and Sections 80EE and 80EEA (benefits under the latter two sections are available only to first-time home buyers).
It is pertinent to mention here that by merely being a co-applicant in the home loan application, a wife does not become a co-owner in the property. Even if she is just a borrower, she would, however, be able to claim tax deductions on her salaried income.
PMAY benefits for women
Under its Pradhan Mantri Awas Yojana (PMAY), the government has made it mandatory that property bought under the scheme, must be registered in the name of at least one woman in the household. In case a woman is borrowing a housing loan under the flagship program’s credit-linked subsidy scheme (CLSS), they also 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% on housing loans of up to Rs 6 lakhs.