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House Buying or Renting: Renting or buying a house – which option is right for you? This decision depends on your future planning. Making a well-informed decision is the wisest approach.

House Buying or Renting: Many people live in rented houses, while others believe they should own their own homes. But many are confused about which option is more advantageous: buying a house or renting. This decision is not just about convenience, but also about finances. Often, people buy a house impulsively or remain in a state of indecision by renting for a long time. In many cases, paying rent proves to be more beneficial, while sometimes taking a home loan to buy a house becomes a way to save on taxes and build assets. Let's tell you what is more beneficial from a financial planning perspective.

What are the advantages of living in a rented house?

The biggest advantage for those living in rented houses is the HRA (House Rent Allowance) exemption. If your salary includes HRA, you can claim a significant tax exemption based on your rent. This exemption is quite effective under the old tax regime. This exemption can be even higher if you live in metro cities. Renting also gives you the freedom to change locations. It's easier to move houses in case of a job change or transfer. Additionally, the responsibility for property tax, maintenance, and major expenses lies with the owner.

How do you get tax benefits when buying a house?

Buying a house through a home loan offers two major tax benefits: exemption on the interest paid on the loan and deduction on the principal amount. This reduces your taxable income. Living in your own home eliminates rent expenses, and the EMI contributes to building an asset. However, initially, expenses like down payment, registration, and property tax seem substantial. Property is not immediately liquid. Nevertheless, in the long run, it becomes a strong asset. With proper planning, a home loan can provide both tax savings and future security.

Which option is right for you? The right option for you depends on your income, job stability, city, and future plans. If your job requires frequent relocation, renting is the more sensible option. However, if you have a stable income, plan to live in the same city for a long time, want to build equity, and take advantage of tax benefits, then buying a home might be a better choice.