All You Need To Know About Home Loan Tax Benefits

A home loan is not only the ultimate medium to own a home but also offers immense benefits you should know. These loans are specifically borrowed by an individual to make the venture of owning a real estate property successful. Due to the specific amendments of benevolent acts by the government, you can now enjoy immense benefits after purchasing a home and paying the loan EMIs.

Tax deductions from home loans

One of the most important benefits is that the home loans offer an immense tax deduction for the borrowers. The relaxation is offered by the government to encourage the investment in real estate properties. Here is the list of benefits a person can enjoy when he is using a home loan platform.

• Under Section 24

The interest you pay for the home loan you have taken can be used under this section for claiming tax deductions. As per this section, you can claim a deduction in tax payments ranging up to INR 2 Lakhs. This benefit can only be availed if the property is occupied by the person who owns it. In fact, the property needs to be completed within a time span of 5 years. If the property is not completed within 5 years, the limit plummets to INR 30,000. If you are not using or residing in the property you own, you cannot claim any deduction in the taxes.

• Under Section 80C

Under Section 80C, you can claim a tax benefit of INR 1.5 Lakh maximum based on the principal amount of the home loan. You can claim this amount under this section and enjoy a huge tax deduction. The only clause to worry in this segment is that if you want to sell the property within a time span of 5 years of occupation, the tax benefit will be reversed and you will have to pay the same amount to the authority.

• Under Section 80EE

This is an additional advantage of tax deduction that a person can enjoy under the section 80EE specifically designed for the first time buyers. When you are planning to buy a home first time in your life, you can make a claim of INR 50,000 maximum against the interest payment of the loan on the top of the benefits you are enjoying with Section 80C and Section 24.

These are the tax deductions you can enjoy based on the housing loan sections 24, 80C, and 80EE. These huge benefits can be enjoyed once the clauses are fulfilled. here are some other benefits that you can enjoy.

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Deduction during the pre-construction period

When you have invested in an under-construction property and you have not started using it but you are methodically paying the EMIs, you can specifically claim interest on the loan amount once the construction is over. The pre-construction interest can be claimed and it amounts to INR 2 Lakh. The deduction can be availed in five specific installments starting from the year of acquisition or completion of construction.

Principal repayment deduction

As mentioned in the Section 80C clause, the principal portion of the loan paid across a year is eligible for deduction. The highest amount that can be claimed in this segment is INR 1.5 Lakh. The same Section 80C can be used for the registration charges and stamp duty deductions. The overall limit needs to be within INR 1.5 Lakh but a homebuyer can enjoy a significant amount deducted from the registration charges and stamp duty.

Joint home loan benefits

In this case, both the loan borrowers can enjoy the deduction limits as per the home loan interest. The benefits from the joint home loans can be availed only when both of the beneficiaries are co-owners of the acquired property. This is where you can enjoy larger benefits from the joint home loans when you have another person to invest. In this aspect, a family or friend can be of great help to enjoy the deductions from joint home loans.

Calculate your benefits beforehand

The most important step before taking a loan is to calculate the benefits beforehand. Once you go through the available deductions in your taxes, you can choose the right path. Consulting the loan providing services will also help in this case.