There are several benefits and exemptions available under the Income Tax Act,1961 in respect of Home Loans.. People often ask from the Tax Consultants and Chartered Accountants about the Home Loan Tax Benefits. We are going to discuss and explain the Home Loan Tax Benefits in this article in a very simple manner.
Other related questions asked by the Home Loan borrowers are also given below:
- Is home loan good for tax benefit?
- What is Section 80EE and Section 24?
- Can I claim home loan on my tax return?
- Can I claim both 80EE and section 24?
We will deal with all these questions in detail in this article.
Home Loan is very popular these days. You can purchase a house of your choice based on your requirement and for purchasing the house you can take Home Loan from any Bank or Housing Finance Companies based on your Income and other eligibility criteria.
Very few people know that under the Income Tax Act,1961, there are several deductions and exemptions available to the Home Loan borrowers. All these Tax Deductions and Exemptions are being explained below:
[1] Under Section 80C of the Income Tax Act, a deduction up to Rs.1,50,000 is given from the total income towards the repayment of principal portion of the Loan during the year.
[2] Under Section 24B of the Income Tax Act, a deduction up to Rs.2,00,000 is given from the total income towards the interest on home loan paid during the year.
[3] Under Section 80EE of the Income Tax Act, an additional deduction of Rs.50,000 is given in respect of Home Loans sanctioned during 2016-17.This additional deduction is available only for those cases where value of the house property is up to Rs.50 Lakh and the amount of Home Loan is up to Rs.35 Lakh.
[4] Under Section 80EEA of the Income Tax Act, an additional deduction of Rs.1,50,000 is available for the first time home buyers.
[5] Stamp duty and Registration Charges paid by the Home Loan Borrower on the purchase of house property are allowed as a deduction upto Rs.1,50,000 under section 80C of the Income Tax Act.
[6] The most beneficial deduction is available to Joint Home Owners and Borrowers. In case of Joint Home Loans, both the Joint owners can claim the deduction under section 80C and Under Section 24B separately. For example, if Sudhir and Shalini have jointly purchased a House Property and have taken a Home Loan on that property jointly and their Home Loan Interest amount is Rs.4,00,000 and Principal repayment is Rs.3,00,000. In this case, out of the entire amount of Rs.3,00,000 paid towards principal, both Sudhir and Shalini can claim Rs.1,50,000 each and out of the total interest of Rs.4,00,000, both Sudhir and Shalini can claim interest of Rs.2,00,000 each. You can see that by purchasing the house in joint names and by taking the Home Loan in Joint Names, Sudhir and Shalini have taken the double benefit of the benefit available under the Income Tax Act without violating any provisions of the Income Tax Act.
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