As soon as Milesh Singh realized that there is a need for him to secure a home loan, he was eager to know how he can save on tax. He later contacted a reputable mortgage broker who gave him the rundown of all the housing loan schemes and applicable tax benefits. He finally secured a property loan for a house of his choice. Just like Milesh Singh, understanding the following can help you secure a housing loan with fantastic tax benefits.
Tax benefits accessible for housing loans are found in Section 80C
A borrower is qualified for duty derivations up to Rs. 1.5 lakh once the principal loan is reimbursed. This is according to Section 80C of the Income Tax Act. This sum gets deducted from your assessable wage. In this way, your aggregate tax obligation diminishes. Your annual tax deduction has more to do with what you have repaid at the end of the financial year.
Let’s assume you paid a sum of Rs. 120,000; you will have an equivalent deduction that same financial year. Property registration and stamp fees are also applicable for tax deductions. This is material even to individuals who did not take a loan for homes to purchase their properties.
Tax benefits accessible for property loans are found in section 80EE
According to section 80EE of the Indian Income Tax Act, a first-time home-buyer can get a tax benefit of up to Rs. 50,000 on home credit interest. There are a couple of provisions following this section.
- You are qualified for this tax cut provided you took the home credit between April 1, 2016, and March 31, 2017.
- You can’t have different properties in your names.
- You should take the credit from a lawful moneylender. Think of an enlisted NFBC or bank. Otherwise, you are not eligible for the tax benefit.
- You can get a tax cut just on credits lower than Rs. 35 lakh.
- You can get tax derivation just if the house you purchase Is less than or equals Rs. 50 lakh.
Tax reductions accessible for home development loans
According to Section 24 of the Indian Income Tax Act; you are qualified for a tax refund of Rs. 2 lakh on the interest paid if you have taken a home loan to purchase, build, remodel, or renovate a property.
In order to purchase your desired home with ease, ensure you speak with an experienced mortgage broker. This will help you to earn a good sum of tax benefits on your home loan.