Home Loan Offers Start From 8.50%,
Home Loan Tax BenefitsThe government offers various tax benefits under the Income Tax Act of 1961 to enable people to invest in a house. It is essential to know of all the benefits of home loan tax because it can help you save a considerable amount of your tax payments.
A home loan includes principal repayments as well as interest payments. Tax deductions may use for both those categories under section 80(c) and section 24(b) of the Income Tax Act.
As well after the announcements during the recent financial budget 2020:Tax advantages for home loans remain constant, even though the period for loans to be made available for affordable housing has been extended by one year-until 31 March 2021. Whereas a housing loan can help you get yourself a home, it could also turn out to be just an expensive thing. The different tax benefits that come with a loan like this help you save money every year. Look at how you can utilize these benefits to the most.
Eligibility on Current Home Loan Tax Benefits (FY 2020-2021)Every section relates to the annual deductions relating to the interest; you are paying on your loan. Below are the relevant details:
- If your property is self-occupied, you can claim the maximum Rs.2 lakh deduction.
- You can claim any amount that you have paid as interest if you let your property out on rent. There are no limits.
- A co-borrower and co-owner of the house can claim tax each up to the maximum amount deductible under this section.
- The Rs.2 lakh tax benefit only applies if the property constructed within five years. If construction not completed within this time frame, you can only claim up to Rs.30,000.
- When you offer the property on loan, you can claim any amount spent as interest, whether or not completed
For first home buyer's additional Interest TAX deduction Benefits under Section 80EEFirst house?claim the following interest deduction in addition to the benefits mentioned above under Sections 24 and 80 C:
- You have taken the loan between 1 April 2016 and 31 March 2017.
- Your property must value below Rs.50 lakhs.
- The loan amount must fall below Rs.35 lakhs.
- Every year you can claim an additional interest rate of up to Rs.50,000 until you repay the loan.
TAX Deduction for Joint Home Loan
- If the housing loan sanctioned for two more persons, each of them is eligible to claim tax benefits on the interest paid up to Rs.2 lakh each
- Tax can reduce the principal paid as well for an amount up to Rs.1.5 lakhs each.
- However, co-owners of the property can claim these benefits. A joint house loan can provide you with more significant tax benefits.
TAX benefits for Possessing A Second property:If more than one self-occupied property, according to the current provisions, then only one of them will be accepted as self-occupied. You have to pay tax on the other property, based on nominal rent. To maximize tax benefits, you can choose either of your properties as the self-occupied one.
As per the finance budget February 2019, it was proposed that the second self-occupied home can also claim as a self-occupied one instead of deemed to let out on rent. It can prevent the incidence of paying nominal rent based tax, helping the owner save money. It will also enable you to claim tax deductions even for the second property.