What are the Income Tax benefits of home loans

New Delhi: For many people, buying a house is the biggest dream of life. There are benefits of buying a house like it makes you feel proud, it brings a sense of security and also creates an asset. With the rising cost of property and inflation, many home buyers opt for home loan to purchase property. You can get Income Tax benefits on your home loan. You can avail deduction on the interest paid on your home loan under section 24(b) of the Income Tax Act. You can also claim deduction on Home Loan under Section 80C of the Income Tax Act

Home loan Tax Deductions under Section 80C

Home loan EMI consists of two parts: principal and interest. Principal repayment is exempted under Section 80C of Income Tax. Under this, a maximum deduction of Rs 1.5 lakh can be availed. Under Section 80C of the Income Tax Act, taxpayers can claim a deduction of up to Rs 1.5 lakh per financial year on the principal repayment of a home loan. This deduction becomes available after the completion of construction of the residential property. However, if the property is sold within 5 years from obtaining possession, this benefit will be reversed.

Tax Deduction on Stamp Duty and Registration Charges

Stamp duty and registration fees can also be claimed under Section 80C of the Income Tax Act, within the overall limit of Rs 1.5 lakh applicable to principal repayment. This deduction can be claimed in the year these expenses are incurred, irrespective of whether a home loan is taken or not.

Tax Deduction on Interest Paid on Home Loan

Interest paid on a home loan qualifies for deduction under Section 24(b) of the Income Tax Act. For a self-occupied property, a maximum deduction of Rs 2 lakh annually is allowed from gross income, provided the construction or acquisition of the property is completed within 5 years.

Tax Deduction on Interest Paid for Under Construction Property

For under-construction properties, interest paid during the pre-construction period can be claimed as a deduction in five equal annual installments starting from the year in which the property is acquired or constructed. This is in addition to the deduction available for interest paid during the post-construction period.

 Tax benefit on a home loan: Under Section 80C of the Income Tax Act, taxpayers can claim a deduction of up to Rs 1.5 lakh per financial year on the principal repayment of a home loan.  Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today