First things first, tax benefits on home loans can be claimed under two sections of the Income Tax Act: Section 24 and Section 80C. Section 24 deals with the deduction on the interest component of the home loan, while Section 80C deals with the deduction on the principal component of the home loan.
If you have taken a home loan to buy a house, you can claim a deduction of up to INR. 2 lakh on the interest paid towards the home loan under Section 24. This is a huge relief, especially since the interest component of a home loan can be quite high. But before you start dreaming of all the things you can buy with that extra cash, keep in mind that this deduction is only available if the house is self-occupied.
Under Section 80C, you can claim a deduction of up to INR. 1.5 lakh on the principal repayment of the home loan. This is great news, but it's important to note that this deduction is not available immediately. You can only claim this deduction after the completion of the construction of the house.
But wait, there's more! If you're a first-time homebuyer, you can also claim an additional deduction of up to INR. 50,000 under Section 80EE. This deduction is available on top of the deductions available under Section 24 and Section 80C. So, if you're planning to buy your first home, make sure to take advantage of this benefit.
To sum it up, home loan tax benefits can be a great way to reduce your tax liability and save some money. Just make sure to read the fine print and consult with a tax professional to make sure you're taking advantage of all the available benefits. After all, who doesn't want to save some extra cash and have a little more fun in life?
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