Housing loan interest tax benefit

How does a home loan give tax benefit? Is it worth taking home loan for tax benefits? Can I claim top up housing loan tax exemption? What are the benefits of taking a housing loan?

While a housing loan can help you get a house for yourself, it can also turn out to an expensive affair. But the various tax benefits that come with such a loan help you save money every year.

Take a look at how you can make the most of these benefits. The only condition is that every applicant of the housing loan must be a co-owner of that residential property. If you take a second home loan to purchase another property, tax benefits are applicable on the payable interests. Couples usually opt for a joint home loan , as this can enhance their home loan eligibility. However, there is considerable confusion, about who can claim the home loan benefit and how much tax benefit one can claim, with respect to joint home loans.

Things you must know about tax benefits on home loan. See all full list on cleartax. But legally you can claim tax benefit on both if you can give a valid reason for this arrangement.

The reasons can be its more convenient to stay. Now, other than this, did you know there is way you can claim tax benefit on a home loan? Compare Loan Options, Calculate Payments, Get Quotes - All Online. Deductions allowed on home loan interest. Available for: Property construction, property purchase.

You will be eligible to claim both the interest and principal components of your home loan during the year. So deduction will be available for: 1. Repayment of principal amount 2. As per Section 80C of the Income Tax Act, home loan borrowers solely can claim tax benefits of upto Rs. FY on the repayment of the home loan principal amount.

In case the house is not let out, there is no maximum limit on the tax benefit for interest payment. There are many more aspects about home loan tax benefits that you must be aware of. Under Section 24B of the Income Tax (I-T) Act, you can claim deduction for interest payable on a loan , repair, renovation or construction. The total cap of section 80C investment is Rs 1. The only exception to that rule is if proceeds from a home loan were used for business purposes. In that case, you would deduct the interest on your business tax return.

Mortgage Refinance Reviews. The condition of availing this tax benefit is owner should live in the house for which home loan is taken or house should be vacant.

Once a home-purchase loan is establishe the prescribed interest rate remains in effect for a period of five years. The amount of interest you calculate as a benefit should not be more than the interest that would have been charged at the prescribed interest rates when the loan or the debt was established. Many schemes like Pradhan Mantri Jan Dhan Yojana are flashing green light on the Indian housing sector by striving to bring down the issues of affordability and accessibility. In this article, we will discuss more home loan tax benefit.

Tax benefits are one of the important consideration when planning to take a housing loan. For a better understanding of these benefits, let us divide the discussion into two parts on the basis of components of EMI. This condition is applicable for self-occupied for which construction is completed within years from the end of the financial year in which loan is taken. Let us understand home loan tax exemption available under Section 80C, Section 2 Section 80EEA. You may claim deductions in your income tax against principal and interest payments that you make towards repayment of your home loans.

Our Tax Savings calculator helps you understand the benefit on income tax before and after taking a home loan. Home Tax Saving Calculator.