How To Avail Tax Benefits On Home Loan?

How To Avail Tax Benefits On Home Loan?

It is a desire for every individual to buy a house of their own. But the dream always remains distant, since the prices of the properties are gradually increasing. It is still necessary to acquire the house and at the same time save a few amounts, as multiple banks are offering home loans.

What Do The Individuals Need?

It is necessary for individuals not only to apply for the massive loan amount that is necessary for buying the house but also look for saving the taxes. In fact, the tax benefit will help individuals to pay a better price for the house.

Through Section 80EE, the government has raised tax benefits on home loan by INR 50,000 for the primary purchasers of houses. The tax exemption has increased the home loan, with a total tax exclusion of INR 4 lacs.

Tax Benefits On Repaying The Main Amount

One is liable to get the exemption of tax with the repayment of the principal sum of home loans, as per section 80 C of the Income Tax Act Of 1961. The amount can be INR 1.5 lacs. One can claim such exemption, along with the registration charges and stamp duty.

Within the first five years, one can sell the house, which is a perquisition of the section. For the financial year of sale of the property, the tax benefits are added to the taxable income, in case one sells the house.

Considerations For The First Time Purchasers

For the first time purchasers, one can claim an additional amount of Rs. 50, 000 annually as mentioned under section 80/EE. One can do it until the loan is repaid. If the value of the property is less than Rs. 50 lakh, the total loan amount should not increase Rs. 35 lakh.

In the financial year, one is entitled to get an advantage of Rs. 50, 000, if one is a first-time purchaser of the house. Under section 24 ( b) and C, there will be tax exemption. When an individual buys the first property for residential purpose, Section 80 EE can be used for tax favour.

It is necessary to keep some of the following points in mind.

• The loan for the home amount should be the same or less than INR 50 lacs.
• The value of the property should be equal to or less than INR 50 lacs.
• The bank, housing finance organization and financial company should be responsible for sanctioning the loan.
• One mustn't own any other property, on the date of loan sanction.

Benefits Of Tax While Repaying The Principal Amount

One is entitled to get a privilege of lesser tax on the home loan repayment of the principal amount. The home loan is available along with tax benefits for the construction, buying and renovation of the property. If the interest was not paid in the financial year, the tax deductions could be claimed on an annual basis.

If the construction of the property is completed within five years, there is an income tax benefit for the amount of 2 lacs.

In conclusion, it can be said that individuals get the right amount of tax benefit on a home loan, and hence, it helps the individual to buy their dream house.