Tax Benefits on Home Loans. The central government has introduced many benefits for home buyers so that more and more people can fulfill their dream of having their own house. One of the most important benefits of being a home owner are the tax benefits. In fact, a home loan is a long-term investment, which also gives you tax exemption for a long period. Home loan is eligible for tax exemption under section 80C of the Income Tax Act. If you are also dreaming of building your own house, then you can take many facilities in housing loan tax benefits. Know full details here –
In fact, most of the people do not have a large amount to buy a house and in such a situation, the government and banks provide a large amount of financial help, so that people can fulfill their dream of buying their own house. This financial assistance is provided by the bank in the form of home loan and the customer has to deposit 10 to 25 percent of the amount as margin money. Here the loan given by the bank also depends on your eligibility.
In the year 2020-21, the Union Minister of India had announced that all the old rules of income tax exemption on home loans will be applicable till the year 2024 and home loans can be availed in this way. In such a situation, it is important for you to know thoroughly about the principal and interest amount, the two major components of your home loan EMI because only then can you avail tax benefits. As per Section 80C of the Income Tax Act 1961, if the property is self-occupied then you can claim tax benefits on the amount paid.
Apart from this, if someone has bought another house with the help of home loan and he is in self-occupied or given on rent, then in such case also one can avail tax benefit on home loan up to Rs.1.5 lakh. Apart from this, tax benefits can also be availed on stamp duty and registration fee.
Home loans are eligible for the interest deduction section under Section 24 of the Income Tax Act. For self-occupied property, you can claim tax exemption on interest amount up to Rs.2 lakh. If you have a second property, then the total tax deduction for both the houses should not exceed Rs 2 lakh.
To avail additional deduction of Rs.1.5 lakh as per section 80EEA, these conditions have to be fulfilled –
Stamp value should not exceed Rs 45 lakhs
- Home loans applied between 2019 and 2020
- The buyer must be the first holder of the property
Keep these things in mind while taking tax benefits
The property must be registered in your name.
The construction of the property should be complete.
Home loan documents are required to be submitted.
Certificate from bank or financial institution with details of principal and interest paid during the year.
TDS of contract value to be adjusted.♦