Getting a house is everyone’s dream and it will be easier to fulfill if you take a home loan. There are so many Financial Institutions who provides home loans at affordable interest rates. You can choose your home loan tenure up to thirty years. You also can save your tax with home loans. You can avail the income tax act of 80C and 24 to get the tax rebates. Here we will give you six home loan tax benefits which will help you to save your tax.
- Interest payment
If you have taken a home loan to buy a home or make one, the construction should be completed within five years from the financial year when you got the loan. The EMI (equated monthly installments) of the home loan has two parts – principal and interest. You have to pay both amounts. You can claim the tax deduction up to 2lakh under section 24 for the home loan interest you are paying. There is no cap on the tax benefit available for the interest of the financial year if you give your house on rent.
- Pre-Construction interest
If you have availed a home loan for a property which is under construction, still you have to pay the EMIs. You can’t avail the tax benefit on the home loan interest for a property which is under construction. Though the legal guidelines stipulate that pre-construction interest may be got deducted from your income in five installments.
- Repayment of Principal
Under section 80C you can avail the tax benefit on repayment of home loan principal. The maximum deduction is 1.5lakh. You only can avail the deduction if you don’t sell that property after five years. If you sell it the deduction of tax you have made earlier will be added to your income.
- Registration charges and stamp duty
You also can claim tax deduction for stamp duty and registration charges under section 80C. The overall limit is for this deduction is Rs.1.5Lakh. The deduction is only available on the year you have made that expense.
- First Time
You can avail the income act under section 80EE if you are buying the home for first time. This income tax act gives you the tax deduction up to 50,000 but it is mandatory your home’s value should not cost more than 50lakh. Your loan amount should not cross 35lakh. The property must be purchased between 1st April 2016 to 31st March 2017. You must not have any other property when the loan has sanctioned.
If you have avail the loan with your partner which means with your husband and wife both of you can enjoy the tax benefits because both of you will get those tax benefits individually but the joint applicant should be the co-owner of that house too for claiming the tax deductions.