Home Loan Tax Benefits

A home loan can be a significant financial commitment, but it also comes with certain tax benefits that can help you save money. Here's everything you need to know about tax benefits on home loans in India:

        1. Tax Deduction on Interest Payment:

• Under Section 24 of the Income Tax Act, you can claim a deduction on the interest paid on your home loan. The maximum deduction allowed is Rs. 2 lakh per year for a self-occupied property.
• If the property is not self-occupied (i.e., it is rented out or vacant), there is no upper limit on the interest deduction.
• The interest deduction is available only if the construction of the property is completed within 5 years from the end of the financial year in which the loan was taken.

        2. Tax Deduction on Principal Repayment:

• Under Section 80C of the Income Tax Act, you can claim a deduction on the principal repayment of your home loan. The maximum deduction allowed is Rs. 1.5 lakh per year.
• To claim this deduction, the property should not be sold within 5 years from the end of the financial year in which the loan was taken.

        3. Additional Deduction for First-Time Homebuyers:

• Under Section 80EEA of the Income Tax Act, first-time homebuyers can claim an additional deduction of up to Rs. 1.5 lakh per year on the interest paid on the home loan.
• To be eligible for this deduction, the loan should be sanctioned between April 1, 2019, and March 31, 2023, and the stamp duty value of the property should not exceed Rs. 45 lakh.

        4. Joint Home Loan:

• If you have taken a joint home loan with a co-borrower, both of you can claim deductions on the interest and principal repayment in proportion to your share in the loan.

        5. Tax Benefits on Under-Construction Property:

• If you have taken a home loan for an under-construction property, you can start claiming the tax benefits once the construction is completed and you have received the possession of the property.

        6. Tax Benefits on Second Home:

• If you have taken a home loan for a second property, you can still claim deductions on the interest and principal repayment. However, the maximum deduction on interest is limited to Rs. 2 lakh per year.

In conclusion, a home loan comes with various tax benefits that can help you save money. It is essential to understand these benefits and plan your finances accordingly. And with ExpressPaisa.com, finding the best home loan offers from various banks and NBFCs has never been easier.