🎟️ Home Loan Benefits In Income Tax

By Abhishek Soni For taxpayers who have an on-going home loan, the interest paid on such loans helps them lower tax liability in the existing income tax structure. However, under the new income tax regime proposed in Budget 2020, the interest paid on housing loan is not available for deduction for self-occupied houses. Women can also avail tax benefits while taking a home loan. The limit is up to 3.5 lakhs covered under section 80 C for Principal repayment and Section 24 (b) on Interest paid. As per the Income-tax Act 1961, the borrowers can claim a deduction of up to Rs 1.5 lakhs under section 80 C and can claim a deduction of up to Rs 2 lakhs under section Income tax return: If a taxpayer is mulling to buy its dream home next fiscal, it still has a chance to avail this benefit of income tax exemption on ₹ 1.50 lakh home loan interest payment This deduction expired in 2016 and was extended to 2017. After 2018, PMI premiums aren’t tax deductible any longer. If there’s an extension, the amount you can deduct depends on your household income. It begins to be phased out after $100,000. Married couples filing separately will see the phase-out start at $50,000. Under Section 80EE, a tax deduction of Rs 50,000 is offered to first-time home buyers against the home loan interest payment, if they meet certain conditions. Click here to read the official text of Section 88EE. Under this section, interest includes ‘any service fee or other charges in respect of money borrowed or processing fees’. The income tax department allows taxpayers to claim deductions, i.e. reducing the taxable income if taxpayer makes certain investments or eligible expenditures allowed under Chapter VI A. 80C allows a deduction for the investment made in PPF, EPF, LIC premium, Equity linked saving scheme, principal amount payment towards home loan, stamp duty The aforementioned sections for home loan tax benefits are already in place in 2020 and are most likely to continue going forward this year. However, the Modi Government is expected to relax the eligibility criteria for available tax rebates under Section 80 EEA. This is the simplest way of claiming both HRA and home loan deductions together. First you must comply with the conditions related to HRA for which you must be an employed person and get HRA as part of salary. "As per Section 10 (13A) of the Income-tax Act, 1961 (‘Income-tax Act’), exemption from House Rent Allowance (HRA) is available if The older provision of Section 80EE allowed a deduction of up to Rs 50,000 for interest paid by first-time home-buyers for loans sanctioned from a financial institution between 1 April 2016 and 31 March 2017. To further provide the benefit to the real estate sector, the government has extended the benefit for FY 2019-20. Tax Exemption on Home Loans: The following are some tax advantages that can be availed by borrowing home loans in India: Principal and interest are both tax deductible. Section 80C of the Income Tax Act provides tax incentives for house loan repayment. The maximum tax deduction amount under Section 80C is Rs. 1,50,000. The most recent IRS data show few low- and middle-income tax payers benefit from the home mortgage interest deduction. Those who filed tax returns with under $30,000 in adjusted gross income (AGI) in 2003 received just 9 percent of deductions for home mortgage interest, despite filing 52 percent of all tax returns. Section 80C allows the deduction for the amount paid towards the principal repayment of the home loan taken from the specified financial institutions. This deduction is allowed under the overall umbrella limit of Rs.1.5 lakh of Section 80C. There is no threshold limit for claiming principal repayment of home loans; hence, any principal payment I f you have taken a loan to purchase your Self occupied property, you are eligible for few income tax benefits/tax deductions under old tax regime (only) for FY 2023-24. The Interest payable on home loan of a ‘ self – occupied ‘ property ‘ can be claimed as tax deduction. Under Section 24 (b) of The Income Tax Act. Every homeowner's financial circumstances are unique, so the impact of tax benefits may vary depending on factors such as income, mortgage size and the amount of interest paid. Understanding these benefits helps you see your mortgage not just as a debt but also as a tool to optimize your finances. The resulting value is your income from house property. This is taxed at per the income tax slab of the individual. Treatment of loss from house property for taxation. In case of self-occupied house property, since the gross annual value is nil, claiming the deduction on home loan interest will result in a loss from house property. .

home loan benefits in income tax