A home doesn’t only provide a perfect platform to purchase your dream home but it also offers a wide range of benefits to the borrower. You can cut on interest rate paid on a home loan, avail of home loan festive offers, negotiate loan terms with your lender if possible and other various ways in which you can easily get tax benefits of a home loan in India.
Want to get a new loan for purchasing your villa, apartment or any other real estate with the tax benefits in India, well we will cover you entirely by providing the best of tax benefits. Read all the guidelines carefully:
Rebates Provides to Home Loan Borrowers Under Income Tax Act
There are various sections you should know in which you can get tax benefits for purchasing your home in India. Let’s have a look:
| Tax Benefit Sections Related to Home Loan | Maximum Rebate/annum | Terms and Conditions |
| Section-24B | 2 Lakhs | This benefit is provided to the home loan borrower with self-occupied property. There is no limit to the properties which come under rented or deemed to be rented. |
| Section-80C | 1.5 Lakhs | It is for principal repayment |
| Section-80EEA | 1.5 Lakhs | This deduction is available for first-time homebuyers to meet specific needs. |
Advantages of Income Tax on Home Loan
There are three major sections of the Income Tax on which the institution provides tax benefits to the home loan borrower on purchasing their dream home. The home loan has two different aspects: the interest amount and the principal amount. You can easily claim the repayment of one of these components as per the guidelines of Income tax. Let’s have a look at several benefits of income tax.
Tax advantages on Home Loans under Section 80C
Under the Income Tax Act of section 80C, you can easily claim for tax dedication based on the principal amount you repay to the lender. This particular dedication applies to several other things like the registration process and the stamp duty fee while you are filling application form to purchase a home.
The maximum benefit under section 80C of the IT Act you can get is 1.5 lakh in a particular financial year.
Note: people who are investing under several other schemes like ELSS funds, PPF, Tax savings and FD, can also get these benefits under the same section of the IT laws.
Housing Loan Tax benefits under 80EE
This benefit is provided only to first-time home buyers. The maximum benefit under this section is 50000 rupees. In case you want to get a new loan to purchase your dream home for the first time, then you are eligible for this amount. You have to abide by the terms and conditions of this loan from your lender to be eligible for the specific loan.
Tax Deduction for Joint Home Loan
If you have opened a joint account for your home loan, the co-owners of the home or the purchased property, can easily claim the additional relaxation and benefits. Every co-owner can easily claim for one of these mentioned deductions based on their respective shares in purchasing the property.
Tax Deductions Under Several Sections of the IT Act
| Sections of Tax benefits | Rebate Component | Max Rebate | Terms & Conditions |
| Section-24(B) | Rebate on Interest | Up to Rs 2 lakh | This benefit is available for the newly constructed house which should be made within the five years of the same financial year in which the loan is availed. |
| Section-80EEA | Rebate on Interest | Rupees 1.5 lakh | This benefit is provided to the home loan borrower having a stamp duty of 45 lakh |
| Section-80EE | Rebate on Interest | Rupees 50,000 | This benefit is applicable for a loan amount of at least 35 lakh if the property value is a minimum of 50 lakh |
| Section-80C | Principal | Rupees 1.5 lakh | It is applicable if the property sale is not done within five years of the completion of the house or building. |
| Section-80C | Rebate on Stamp Duty | Rupees 1.5 lakh | It should be claimed in the same financial year by the home loan borrower. |
Note: Joint home loan participant can easily get the rebate on the interest and other home loan terms based on their share and their eligibility criteria. You should show all the papers to the lender to present your ownership of the property.
Summary
Want to take a new loan to borrow a dream property in your preferred area? Get tax benefits under several sections of the Income Tax real estate segment. You can get several benefits which are offered by several actions like 80C, 80EE, 80EEA, 24 (B) and so on. Make sure to read all the guidelines as per the policy of the income tax.
