Home loan Tax Benefits

Everyone dreams of buying their own house. Many people fulfill their dream of buying a home through home loan, while many people who are hesitant to take home loan for different reasons. In order to buy a house and encourage investment in property, the government gives various exemptions on home loans so that they can save a lot of tax in 1 year. Know the tax benefits available on home loan:

1. #Deduction on repayment of #principal

While taking a home loan, the principal amount has to be repaid in the beginning. Income tax deduction of up to Rs 1.5 lakh is available for repayment of principal amount under section 80C in any financial year. However, for this the construction of your house should be completed in 5 years. If for any reason you sell the house within 5 years of buying the house, then this tax deduction will be withdrawn.

2. #Registration and Stamp Duty

You can also claim deduction of stamp duty and registration fee under section 80C. You can claim this deduction in the same year in which you have paid these expenses. To claim this deduction, it does not matter whether you have taken a home loan or not. Note that under section 80C of the Income Tax Act, only deduction up to Rs 1.5 lakh can be claimed in any year including all expenses.

3. #Interest

The interest paid on the home loan can be claimed as deduction under section 24(b). Deduction can be claimed under this section only up to Rs.2 lakh. For this the construction of your house should be completed in 5 years. If the construction takes more than 5 years, then you can claim deduction only up to Rs 30,000. If you have given a house on rent, then you can take deduction of the entire amount of interest you pay. There are no conditions regarding the period of construction of the house.

4. For first time home #buyers

Those who are buying a home for the first time can claim a separate deduction of up to Rs 50,000 on the interest paid on the loan under section 80EE. However, only those who bought a house between 1 April 2016 and 31 March 2017 can take deduction under this section. Apart from this, the value of the property should be between 35 lakhs to 50 lakhs.

5. #Joint home loan

If two people take a loan together, then the government gives separate deduction to both of them for paying interest up to 2 lakh and repayment of 1.5 lakh principal. However, for this, both of them should be the shareholder of the house.

6. #HRA

If you have taken a home loan and are living in a rented house, you can avail the tax benefits of both home loan and HRA.

Whichever of these three amounts is less, you can claim HRA on that basis.

HRA received from #employer

50% of the salary. If you live in a small town, then 40 percent

The amount received after deducting 10% of the salary from the actual rent

7. #Deduction under section 80EEA

After the announcement made in Budget 2019, now if you have taken a home loan after 1st April 2019 and before 31st March 2020, then you will get an additional tax deduction of up to Rs 1.5 lakh on the interest paid. This deduction will be available under section 80 EEA. Your home loan amount should not exceed Rs 45 lakhs to avail this deduction.