Amidst the launch of different housing loan schemes like Pradhan Mantri Awas Yojana by the Government of India, the real estate sector has witnessed substantial growth over the years. One of the key advantages that borrowers get to enjoy with availing a home loan is the tax benefits it offers. Since EMIs are ideal repayment methods for this particular loan variant, which includes paying the principal amount and interest rates, home loan tax benefit inevitably applies to both of them.
According to the Income Tax Act, 1961, borrowers get to enjoy exemptions in taxable income for both these components, which allows them to save substantially while investing in the purchase of a house.
Therefore, it is necessary to be aware of aspects related to the same and evaluate the amount using a home loan tax benefit calculator. Following are some tax deductions applicable for individuals availing a home loan -
Section 24: Under this particular Section of the Income Tax Act, you can claim deductions on your home loan interest amount, up to a maximum amount of Rs.2 lakh. However, there are certain norms and home loan eligibility criteria borrowers are required to meet in order to avail of this benefit.
Section 80EE: For every first-time homebuyer, Section 80EE seems quite beneficial since it allows them to claim an extra subtraction of Rs.50,000 per FY towards interest payments. However, this benefit is applicable to individuals who have availed the loan between 1st April 2016 and 31st March 2017. Also, individuals applying for a joint home loan can enjoy additional savings as both the applicants are eligible to claim the home loan tax benefit.
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