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CA Ruchita Vaghani compares buying a Rs 1 cr home in India with cash versus EMI, discussing pros, cons, and tax benefits to guide millennials and GenZ in making informed decisions.
Home Buying in India: Tax Benefits, Costs, and Smart Choices
Buying your own home in India is not only a big financial decision but also an achievement in India. Earlier, Indians collected their lifetime earnings and then spent them to buy their own house or flat. It’s always attached to the matter of pride and prestige.
However, with easy accessibility and availability of credit in modern times, thanks to new-age fintech companies and flow of capital, millennials or GenZ aren’t waiting for old-age or having enough money to buy a home. They are taking their own home on EMIs (Equated Monthly Installment), a modern credit instrument where customers pay the lenders the credit amount on a monthly/quarterly/semi-annual basis. Thus, they can have their dream of having a house at a young age.
However, it’s that simple. Is it wise to have a house on EMI or is the old age technique of collecting money to buy a house better?
CA Ruchita Vaghani explores this universal dilemma in one of her X posts, comparing buying a Rs 1 cr home in cash versus taking a home loan and highlighting pros, cons, and tax benefits to help buyers make an informed choice.
CA Ruchita Vaghani shares pros and cons on this dilemma:
| Category | Details |
|---|---|
| Pros of Buying Rs 1 Cr Home in Cash | – No EMI burden → peace of mind– No interest cost → immediate ownership– No fear of rising interest rates → strong negotiating power |
| Cons of Buying Rs 1 Cr Home in Cash | – Savings locked in an illiquid asset– Lose potential investment returns– Limited liquidity for emergencies |
| Pros of Buying Rs 1 Cr Home on Loan | – Liquidity safety → can invest saved amount– Tax benefits under Section 24(b) → Rs 2 lakh/year on interest– Tax benefit on principal → up to Rs 1.5 lakh/year– Combined tax advantage → Rs 3.5 lakh/year– Inflation advantage → repay loan with future money– EMI easier as income rises– Potential higher returns on investments than loan interest |
| Cons of Buying Rs 1 Cr Home on Loan | – Total outgo ~Rs 2.07 cr for a Rs 1 cr home– EMI for 20 years at 8.5% → Rs 86,000– Total interest over 20 years → Rs 1.07 cr |
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
September 05, 2025, 15:15 IST
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