Tax Benefits On Your Home Loan
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 Kolkata, November 7: When 29-year-old Sharmila bought a home in Noida, her financial consultant told her that it would let her avail several tax benefits. Tax benefits on home loan act as an incentive for people to buy homes. Let us look at some of the tax benefits you can claim if you have a home loan. 

When you pay your home loan EMIs, you are basically paying both principal and interest. So your home loan repayments have two components and tax deductions are available on both. 

Section 80C: Under Section 80C, you can claim tax deductions on the principal component up to Rs 1.5 Lakh in a financial year. However, remember that limit also applies to other payments and investments like insurance premium, PPF, ELSS, 5 –year tax-saving FDs and so on. Also, there is another thing one needs to keep in mind. You cannot sell the property within 5 years of taking possession to be able to claim this deduction. If you do, the deduction will be reversed.

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Section 24: This section offers deduction on the interest paid. If the house is self occupied, the maximum interest you can claim as a deduction is Rs 2 Lakh. However, if the house is let out, then you can claim the entire amount as interest and there is no upper limit. 

Section 80EE and Section 80EEA: Both these sections are applicable to first time home owners and offer additional deduction on interest over and above Rs 2 Lakh in Section 24. Under Section  80EE one can claim an additional Rs 50,000 deduction on interest subject to certian conditions. In the latest budget Section 80EEA was introduced under which one can claim an additional deduction of Rs 1.5 Lakh over and above Rs 2 Lakh on interest paid. However, this deduction is available only for affordable homes. However, some conditions need to be met to claim this deduction. The stamp duty of the house property should be Rs 45 Lakh or less. Also, the carpet area of the house should not exceed 60 sq mt (645 sq ft ) in major metros and 90 sq mt( 968 sq ft) in other cities. 

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“Along with Credit Linked Subsidy Scheme (CLSS), which offers a subsidy of upto Rs 2.67 Lakh, the enhanced income tax deduction limit gives a good positive sentiment vis-a-via significant impact. And government’s intensified measures to restore growth with recapitalisation of banks/ NBFCs and stress funds would definitely have a good prospect for reviving the growth of the sector. Also with the government’s focus on housing for all by 2022, it would boost the affordable housing segment wherein almost 50 per cent of 7.95 lakh units to be delivered by December 2020, are going to fall in this segment,” says Vikas Wadhawan, Group CFO, Elara Technologies, that owns PropTiger.com, Housing.com and Makaan.com. 

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