Building a house is everyone’s dream. You might take a home loan for it. However, do you know that you can avail tax benefits from your loan?
Well, taking a home loan can help you save a lot on your income tax payments.
Let us walk you through all the details of home loan tax benefits so that you can take advantage of them.
1. Deduction On Repayment Of The Principal Amount
Your home loan EMI consists of two parts – the principal amount and the interest. You can claim the former as a deduction on your taxable income under Section 80C of the Income Tax Act. It allows you to claim a maximum of Rs 1.5 lakhs. Well, you can also claim deductions on the amount you spent on stamp papers and registration charges.
2. Deduction On Interest Payments
The interest you pay on your home loan is also liable to tax deductions. It is available under section 24. Here you can claim a deduction of up to Rs 2 lakhs in a financial year. Any interest payments exceeding that amount will, however, not get deducted from your taxable income.
3. Deductions On Joint Ownership
Do you own a house jointly with your partner? In that case, both of you are eligible for income tax deduction when you apply for home loan. Each of you can get a deduction of up to 1.5 lakhs on the principal amount and 2 lakhs on the interest. So, the next time remember to take a home loan jointly to get greater tax benefits.
4. Claim Additional Deductions Under Section 80EE
On taking a home loan, you can claim an additional deduction of Rs 50000. However, the loan amount must be within Rs 35 lakhs and the value of the property should not exceed Rs 50 lakhs.
5. Additional Deduction Under Section 80EEA
The Section 80EEA also allows home buyers to avail additional deductions. It is available only to individual taxpayers and not to businesses. You can avail a deduction of up to Rs 150000 on the interest. Guess what? This deduction is available over and above the Rs 200000 that gets deducted from the interest payments. However, you have to meet certain conditions.
- You should not own any other house while applying for the home loan.
- You should not be eligible to claim any deduction under Section 80EE.
- Your house must have a carpet area according to the specified norms.
The Bottom Line
These tax deductions are an effort to make house building more affordable. They encourage more people to apply for home loan. After all, everyone should be able to fulfill their dream of building a house.
PNB Housing is committed to fulfill the dreams of people by offering affordable home loans. You can choose from their flexible plans.
Moreover, you can stay assured of the best interest rates. So, why are you still waiting? Visit the website of PNB Housing Finance and take a step forward towards your dream house.