Friday, July 10, 2020
Home Business Top Facts To Know About Home Loan And Taxes

Top Facts To Know About Home Loan And Taxes

The Government of India offers home loan tax benefits to individuals who take a loan to purchase their first house

The Government of India offers home loan tax benefits to individuals who take a loan to
purchase their first house. The aim is to provide a boost to the real estate market and encourage individuals to own homes. You can also avail tax benefit on the interest paid on all your home loans, regardless of whether it was for your first home or not. Let us take a look at the various scenarios involved:

Deduction for principal repayment
Under Section 80C of the Income Tax Act, the actual principal repaid towards your home loan can be claimed as a deduction. The deduction is available for your first home. The deduction is also applicable to a rented home when the owner is staying in a different town for work. The maximum deduction available under Section 80C is ₹1,50,000. The limit is raised to ₹2,00,000 for senior citizens.

loan, home, tax, India, purchase
The aim is to provide a boost to the real estate market and encourage individuals to own homes.

Deduction for interest paid on a home loan
Income tax benefit on home loan also includes deduction on the interest paid under Section 24 of the Income Tax Act. If the construction of the home was completed within five years of the loan disbursal, actual interest paid up to ₹2,00,000 are allowed as a deduction when calculating the taxable income for the individual. The cap is increased to ₹3,00,000 for senior citizens if the loan was for a self-occupied first home. If the construction of the home is not completed within five years, the tax exemption is allowed up to ₹30,000 only.

Additional deduction under Section 80EEA
Under Section 80EEA, an additional deduction of ₹1,50,000 can be availed if the loan was for the purchase of an affordable house under ₹40 lakh till March 2020. Again, this deduction can only be availed for a self-occupied first home.

ALSO READ: Ola Announces Expansion of its Ola Bike Service to 150 Cities Across India

Additional deduction under Section 80EE
If you have taken a loan for your first home after 1st April 2016, you may be eligible for an
additional deduction of ₹50,000 under Section 80EE of the Income Tax act. You can avail this deduction if your home finance was for less than ₹35,00,000 and the value of the property was under ₹50,00,000.

Deduction for interest paid pre-construction
Deduction on home loan interest rate is only available after completion of construction or
immediately on the purchase of a fully constructed house. But the EMI payments would start as soon as the loan is disbursed. You could still claim Income tax benefit on home loan interest paid during the construction phase – you would do this after the construction has been completed. The interest paid can be claimed in equal parts for five financial years post-completion, up to a maximum of ₹2,00,000 per year. The limit includes both the interest paid in the current year and the deduction being claimed for the interest paid during the construction of the property.

STAY CONNECTED

18,990FansLike
362FollowersFollow
1,783FollowersFollow

Most Popular

Ageing, Muscle Mass and Your Health

We've all battled with a lid that just won't budge. Maybe we tried banging it on the counter or holding it under hot water,...

Tips to Rejuvenate Your Home This Shravan

The fifth month of the Hindu calendar is called 'the holy month of Shravan', known to be a conduit for conveying natural and tremendous...

Here’s How Yoga Improves Reproductive and Sexual Health

Yoga is an ancient method of relaxation, exercise, and healing that has gained a wide following across the world. It rejuvenates the mind, body,...

Research on Link between Humans and Cats on Silk Road

In some news for cat lovers, new analyses done on an almost-complete cat skeleton found during an excavation along the former Silk Road in...

Application Rate per Job Increases by 48% Amid Covid-19 in India

Rate of applications per job has now increased by 48 per cent in India compared to average applications per job in the pre-Covid period,...

Spotify Signs Deal With Archie Comics to Produce Podcasts

Swedish audio streaming giant Spotify on Friday signed an exclusive deal with Archie Comics to produce podcast adaptations starring the comic book publisher's iconic...

3 in 4 Indians Prefer Watching Movies on OTT Platforms Amid Pandemic

Three in four Indians would prefer to watch a movie on various over-the-top (OTT) platforms in the social distancing times compared to just one...

Poor Indian Children Consistently Face Educational Disadvantages: Researchers

Children from poorer households in India consistently experience educational disadvantages as compared to their wealthier peers, say researchers, adding that the girls are more...

Recent Comments