Tax exemption for housing loan
The following is a list of tax deductions for interest on a home loan that you can claim this year if you meet specific criteria:
- If your property is self-occupied, you can claim a limit of 2 lakh.
- If your house is in rent, you are entitled to assert the actual amount of interest paid on your home loan, up to an absolute cap.
- The deduction is available up to the total limit for each co-borrower who is also a co-owner in the case of a joint home loan.
- In the case of an under-construction house, the maximum cap of 2 lakh is applicable only if the construction is completed within five years of the financial year in which the loan is taken out. If not, the applicable deduction is capped at $30,000 a year.
Under section 80 to claim the housing loan
Only when filing the ITR, will you claim the tax gain under section 80C.
Ensure your digits are correct in the different income heads as applicable to you when filling out your ITR form.
Calculate the tax benefit you intend to assert in the section of deductions under section 80C.
Since section 80C covers several other deductions, such as premiums and provident fund contributions, You must determine how many of the available deductions under the section you can demand.
Section 80 EE tax benefits
- Income tax act section 88EE, the tax gain applies to home loans taken out between April 1, 2016, and March 31, 2017.
- To be eligible for this deduction, the borrower does not own a home when the loan is accepted.
- The deduction under section 80ee is limited to a maximum of 50,000 dollars.
- The interest on the home loan is liable for the deduction.
- A home loan of less than Rs. 35,00,000 accounts for the deduction. Besides, the property’s worth does not exceed Rs. 5 lakh.
Section 24B tax benefits
You may deduct the interest on a home loan taken out to build a new home or buy a residential property under section 24B of the Income Tax Act. The interest on a home loan can be deducted on an accrual basis. Consequently, regardless of whether you have paid the interest until now or not, you will demand a deduction for the interest rate for the year.
To claim the tax benefit on the home loan
To assert a tax advantage on a home loan, follow these steps: Calculate how much interest on a home loan, you will claim as a tax deduction. After that, you should give your employer your home loan interest certificate so that the deduction can be changed with TDS. You can also file the ITR and request the certificate yourself if appropriate. It is not mandatory to apply for the certificate if you are self-employed. However, you can keep it with you in case the IT department needs it.
✅What is the method for seeking tax benefits on a home loan?
When filing your ITR or sending the home loan interest certificate to your employer, you will claim tax benefits on a home loan.
✅How much of a home loan should be deducted from your taxes?
You can subtract up to 1.50 lakh for principal repayment and up to 2 lakh for interest on a home loan in a given financial year.
✅Is a Home Loan Useful for Taxes?
Yeah, the government wants you to take out a mortgage and purchase a home. You will subtract both principal and interest on your home loan while filing your taxes.
✅What is the importance of a home loan?
You may not need to save a significant sum of money to buy a house if you take out a home loan. Choosing your own money over a loan will cause your fund to become trapped. It will take years to recover. Taking out the loan helps you invest your money in other ways to provide you with greater returns.
✅Is it possible for both husband and wife to claim home loan interest?
Both husband and wife will seek a deduction on home loan interest if they are co-owners and co-borrowers of the loan.
Table of Contents
- 1 Tax exemption for housing loan
- 2 Under section 80 to claim the housing loan
- 3 Section 80 EE tax benefits
- 4 Section 24B tax benefits
- 5 To claim the tax benefit on the home loan
- 6 FAQs