Home Loan Tax Benefits at a Glance!

By SiliconIndia   |   Thursday, March 15, 2018
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Purchasing a home is a once in a life decision. Earlier, people used to save their entire life to fund a home. The affordability notwithstanding, almost all of us have a desire to have our own homes, right? Modern finances have paved the way for arranging the funds required for purchasing a home these days in the form of best Home Loan rates from many offline and online lenders.

If you have the required Home Loan eligibility such as good CIBIL or Credit Score, a consistent income source, clean repayment history, you can easily avail better-priced Home Loans in India. Availing a Home Loan also gifts you the benefits of tax benefits.

Let’s help you understand some Sections of the Income Tax Act to make things clearer to you as far as Home Loan tax benefits are concerned. All ready to roll? Let’s go!


Tax Benefits on A Home Loan – Section 24, 80EE and 80C

The Section 24, 80EE and 80C provides a Home Loan borrower with many Home Loan tax benefits. Let’s have a look at them one by one. 

Section 80C: Tax Benefit on a Home Loan (Principal Amount)

Section 80C of the Income Tax Act allows the amount paid as the Home Loan’s principal amount by a borrower or HUF to be sanctioned under tax deduction. The maximum amount that’s allowed under Section 80C of the Income Tax Act is Rs.1,50,000. You need to know that this entire deduction is the sum of all deduction sanctioned under Section 80C and also includes money invested in PPF account, FDs, National Saving Certificate, Senior Citizen Saving Scheme and more.

Section 24: Income Tax Benefit on Interest on Home Loan

The Section 24 of the Income Tax Act allows deduction in the form of tax benefit on Home Loan for the interest’s payment. As per the clauses of Section 24, the income from house property is reduced by the figure of interest paid on a Home Loan. However, the condition is that the Home Loan should have taken for the purpose of construction, purchase, renewal, repair, and reconstruction of residential housing property. 

Section 24 of the Income Tax Act allows a maximum limit of up to Rs.2 lakh for self-occupied property.

Section 80EE: Income Tax Benefit on Home LoanInterest (First-Time Buyers) 

Section 80EE was re-introduced in the union budget 2016 which has a provision for an additional deduction of Rs. 50,000 for Home Loan’s interest. The facility is over and above the tax deduction of Rs.2 lakh under the Section 24 and Rs.1.5 lakh as per the Section 80C.

Section 80EE is Applicable only in The Following Cases such as: 

       -  The deduction would be allowed only if the purchased property’s value is less than Rs.50 lakhs and loan’s value is not exceeding Rs.35 lakhs.

       -  The deduction’s benefit is available until the time the loan’s repayment is made. 

How to Claim These Home Loan Tax Benefits?

To claim these vital Home Loan tax benefits, you would need to furnish the lender’s statement which could indicate the payable amount and paid for principal and interest. Once a Home Loan borrower claim the discussed tax benefits on a Home Loan, the remaining balance of a person would be taxed as per the clauses or the norms of the Income Tax Slab Rates. 

The Bottom Line

If you have any further issues, you can always get in touch with a well-known financial advisor to sort out your issues if you have a Home Loan to avail in the future. You can also apply for an online Home Loan at a competitive Home Loan rates on a leading lender’s website super easy!



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