Home loans offer several income tax exemptions for borrowers. Discussed below are the ways and how to avail such tax benefits on a home loan –
Section 80C
Under Section 80C, you can enjoy tax exemptions of up to Rs. 1.5 Lakh against the amount paid towards the principal portion of your EMIs. This section also provides an exemption for the amount paid towards the stamp duty and registration charges.
To claim this benefit, the borrower cannot sell the purchased property within 5 years from the date of possession. Furthermore, to claim this benefit you must know about income tax in India and its clauses and rates.
Section 24(b)
You can claim tax benefits under Section 24(b) against the amount paid towards the interest component of your EMIs. The maximum limit of exemption that can be claimed is up to Rs. 2 Lakh.
Section 80EEA
Under Section 80EEA, affordable housing loan borrowers can avail additional exemptions of up to Rs. 1.5 Lakh on the interest paid. To enjoy such benefits under this section, the stamp value of your purchased property should not exceed above Rs. 45 Lakh. Income tax benefits under this section are only available until March 2020.
In addition to the above, you can also claim income tax deductions with detailed know-how from a complete guide to the benefits of taking a home loan. One can also use an Income Tax calculator online to calculate an estimated amount. Each borrower can avail exemptions up to the maximum amount mentioned under each section in such cases.
