Income tax benefits on a home loan are one of the advantages, which reduce the financial burden of a borrower since these advances are high-value.
Under government clause and initiatives, there are vitally two tax benefits that home loan customers can avail. The underneath discusses these tax benefit clauses –
Section 80C: Under this section, individuals can claim an exemption of up to Rs 1.5 Lakh on the home loan principal.
Borrowers cannot sell their house within 5 years after purchase or construction.
Section 24(b): Under this section home loan borrowers can avail deductions to the tune of Rs. 2 Lakh on the interest paid.
The purchase or construction of a property must be completed within 5 years. If not, then this exemption will reduce to Rs. 30,000.
Also, this section is not applicable during the pre-construction period. The exemptions during this period will be available in five equal installments after the completion of construction.
Section 80EEA was inserted in the 2019 Budget. This section will also provide income tax benefits on home loans under the affordable housing schemes. However, this section will only be applicable until March 2020.
The stamp value of a house must not exceed Rs. 45 Lakh to be eligible for this section. Also, the carpet area of a property must not be more than 60 sq. m in Mumbai, NCR, Bengaluru, Kolkata, Chennai, and Hyderabad and 90 sq. m in other cities.
Additional Read: Tips for Utilizing Income Tax Benefits on Home Loans to the Fullest
