The government of India provides several tax benefits to individuals securing home loans for more citizens to go for buying their property or building their own homes. These regulations fall under the income tax act of 1961.
Several different facilities and reliefs are provided by the Government of India. Different kinds of home loans can avail of different tax benefits.
Listed below are several home loan tax benefits that are provided by the government of India for its citizens.
This is the Repayment of the principal amount benefit. Individuals accessing this act receive a tax deduction on their principal repayment amount. The maximum deduction they receive is up to 1,50,000.
This is the payment of interest act. This act states the tax deduction of the payment of interest that is paid on the home loans that are provided for the construction of the home property that is constructed in less than a 5years. The maximum deduction you can deceive from your home loan finance is up to 2,00,000 INR.
This is the additional deduction act. This act allows additional directions that are sanctioned by the government. It is facilitated under cases where the home loan that is taken is for the first property owned by the individual. However, the value of the property must not exceed 50,00,000 INR. The maximum deduction sanctioned under this act is up to 50,000 INR.
Section 80 EEA
This is the interest on home loans act. This is exclusively for first-time homeowners. Under this act, the deductions available are within the limit of 1,50,000 INR. This is an additional deduction that is added after the deduction under section 24. Individuals meeting the required terms and conditions of this benefit can call for a tax deduction of 3,50,000 INR for the interest on their home loans.
Section 24 and Section 80C
This is the joint home loans on interest and principal amount payment act. Everyone who is claiming for the home loan can separately claim for a tax deduction on their home loan interest. They can claim a deduction of up to 2,00,000 INR each.
The tax deduction under section 80C allows a tax deduction of 1,50,000 INR based on principal repayment.
Steps to Avail Tax Benefits on Home Loans
Before calling off the tax deduction under the laws set by the government of India for individuals proceeding with home loans, you will need to calculate the tax deduction.
You will also need to prepare all the proper documents that you will require to file for a tax benefit under the laws set by the government. You will need to provide all the documents related to your home or property ownership.
Home Loan Interest Certificate
After assembling all the proper documents, you will need to submit your interest certificate for a home loan. You can access it using the online home loan calculator facility.
Further, you will need to file a Tax Return to receive the tax benefits.
A home loan, even after choosing the right one, has several additional costs. These costs can be further deducted if you use them wisely. The government of India, to promote buying and owning homes amongst the younger generation, has come up with and facilitated several tax benefits on home loans thus making the process easier.