It’s a dream come true for anyone to own their own home. The Indian government has always been willing to allow people to invest in a home. Therefore, under Section 80C, a house loan is entitled to a tax deduction. So when you buy a home on a house loan, you do have several tax benefits that reduce your tax efficiency considerably. So, Check Home Loan Tax Benefits below.
- 1 Tax Exemption Benefits on Home Loans:
- 1.1 Tax premiums paid on debt for housing
- 1.2 Interest taxes charged on house loans for the time before building
- 1.3 Principal Repayment Deduction
- 1.4 Stamp Duty and Registration Charges Deduction
- 1.5 Section 80EE Additional Deduction
- 1.6 Few More Deduction Under 80EEA Section
- 1.7 Joint Home Loan Deductions
Tax Exemption Benefits on Home Loans:
Tax premiums paid on debt for housing
For a house buying/building, a home loan must be obtained and construction shall be finished within five years of the conclusion of the financial year in which the loan was issued. It contains two components–interest rate and key repayment–when you pay EMI for a housing loan. As a deduction from the gross income up to a full Rs 2 lakh in Section 24, the interest component of the EMI payable for the year is reported. There is no upper limit to claim value for the sale of land. Nonetheless, under the head of House Property, the total liability one can claim is limited to only Rs 2 lakh. This payment can be received from the year the building is finished.
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Interest taxes charged on house loans for the time before building
Think, you purchased and have not yet moved to a sub-construction house. You pay the EMIs, however. In this case, it is only after the house is finished when you purchase a fully-built property you continue to be able to assert interest on the home loan as a deduction. Will that also mean that you do not benefit from any tax benefits on the interest paid in the period from debt taking to completion? Actually, not. Let’s see now. For a deductible from the year in which the home is purchased or construction is done, the income tax statute also pays for the calculation of the value known for pre-value, in addition to a deductible from the taxes you would otherwise be entitled to bill on your house rent. The permissible eligibility for Rs 2 lakh, however, remains limited.
Principal Repayment Deduction
As a deduction under Section 80C, the major component of the EMI charged over the year is permissible. The cumulative claimable sum is Rs 1.5 lakh. Yet the house property cannot be sold in 5 years after its possession to claim this deduction. When that is not the case, the benefit claimed earlier will be applied in the tax year to the profits.
Stamp Duty and Registration Charges Deduction
Besides claiming the deduction for principal repayment, a deduction for stamp duty and registration charges can also be claimed u/s 80C but within the overall limit of Rs 1.5 lakhs. This should only be claimed in the year in which these costs arise.
Section 80EE Additional Deduction
The house buyers are allowed up to Rs 50,000 for an additional deduction under Section 80EE. The loan value should be Rs 35 lakhs or lower and the valuation of the property must not surpass Rs 50 lakhs for demanding the balance of such deduction. And no one owns any other house on the date the loan was approved.
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Few More Deduction Under 80EEA Section
For home buyers for a limit of Rs 1,50,000, the extra deduction was implemented in the 2019 budget under Section 80EEA. The stamp value of the property must not surpass Rs 45 lakhs in order to assert this deduction. From 1 April 2019 to 31 March 2020, the loan will be approved. And no one owns any other house on the date the loan was approved. The individual may also not demand a deduction in compliance with section 80EE.
Joint Home Loan Deductions
If the debt is collected together, each lender will demand a reduction in his or her individual tax returns for interest on the home lent to Rs 2 lakh and principal repayment u/s 80C to Rs 1.5 lakh each. They will also be co-owners of the loaned property in order to assert this deduction. Loans paid along with your relatives will then help you get a larger tax gain.
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