Buying your first home is really amazing. The first time home buyers can get tax deduction under 80EE of the income tax act 1961. You can get a maximum tax deduction of Rs. 50,000 during a financial year. Under section 24 and section 80C you can claim Rs.2,00,000 and Rs. 1,50,000 respectively.
In 2013-14 80EE was designed for the first time. On that time the tax deduction was Rs.1,00,000. The tax benefit was available only for two years FY 2013-14 and FY 2014-15 and this tax section was reintroduced on FY 2016-17, and the deduction changed to Rs.50,000 for interest paid towards home loan.
Features of the 80EE tax deduction
- If you are a HUF, AOP, a company or any other kind of taxpayers you can’t claim this deduction. This deduction is available only for individuals.
- Under section 24 of the income tax act, the deduction is over above the Rs.2lakh limit.
- Either the property will be self-occupied or non-self-occupied.
Eligibility for section 80EE
- That house should be the first house that tax prayer has purchased.
- That house’s value should not cross the amount of 50lakh.
- That home loan amount should be 35lakh or less.
- The interest portion is only deductible for the home loan.
- That home loan should be sanctioned from a financial institution or housing finance company.
- On that sanctioned date that tax prayer individual should not own another house.
- This loan is not allowed for commercial properties.
- If you want this tax deduction the loan should be sanctioned on 01.04.2016 to 31.03.2017.
Home Loan Tax Deduction Details
Tax Deduction Details for home loan
|Principal||80C||1.5Lakh||You can’t sell your property within 5 years of purchase|
|Interest||24b||2lakh||Must be construct within the five years of availing the loan.|
|Interest||80e||50,000||The loan amount should not cross 35lakh and the property value can’t cross 50lakh|
|Stamp Duty||80c||1.5lakh||You only can get this benefit only in one year when the tax stamp duty expenses are paid.|
How to Claim tax benefits on home loan
Step 1 – First calculate the tax deduction you will claim.
Step 2 – Check that the house is the name of your or your co-borrower.
Step 3 – You have to submit your home loan interest certificate to your employer to tax deductible at source.
Step 4 –if you didn’t submit it on your employer you can save tax to file the tax return by yourself.
Step 5 – If you are self-employed you don’t have to submit these documents. Just in case if the IT department requires any quarries it will help.
How to Calculate Tax Benefits on Home Loan?
You can calculate your tax amount with the help of these –
- Loan Amount
- Interest Rate
- Starting of the loan date
- Gross annual income
- Existing Deduction under 80C/D