When it comes to buying or building your new home, a home loan is one of the best solutions. Not only does it provide a large amount that one can repay over a longer tenor, it also allows savings via home loan tax benefits.
A quick look at home loan tax benefits
1. Deduction for home loan interest rate payment paid on housing loans
Your home loan repayment EMI has two components, the principal and the interest. For repaying the home loan interest rate charges on the EMI, you can claim a deduction of up to Rs.2 lakh under Section 24. The purchase or the construction of the home must be completed within 5 years from the end of the fiscal year the loan was granted.
2. Deduction on principal repayment
The principal portion of the home loan is eligible for a deduction of up to Rs.1.5 lakh as per Section 80C. But to claim this tax benefit for home loans, you must not sell your home within 5 years of possession.
3. Deduction for stamp duty and registration charges
It is also possible to enjoy a deduction of up to Rs.1.5 lakh towards stamp duty and registration charges under Section 80C.
4. Deduction for joint home loans
If you have availed a home loan jointly, each of the borrowers is eligible to avail of a deduction for home loan interest rate payments up to Rs.2 lakh. For principal repayments, the maximum amount is up to Rs.1.5 lakh. You need to be the co-owner of the property taken on the loan to avail of this.
You are now aware of the home loan tax benefits, you can avail of a home loan at affordable rates and enjoy the
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