Tax Benefits On Home Loan: Purchasing or building your own home is one of the most essential things in an individual life. These days some people build houses as per their own needs while some people buy flats or houses from builders. In both cases, the majority of people take home loans. In such a situation, one thing you need to be aware of is you get various types of tax benefits when you have a home loan.
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You get tax benefits on home loans under various sections of Income Tax, which you must utilize. Under Section 80 EEA, you can avail tax benefit of Rs 1.5 lakh on the interest paid on the home loan. The benefits under Section 80 EEA are in addition to the tax exemption of Rs 2 lakh available under Section 24(b). Benefits available under 80 EEA are available only under the Pradhan Mantri Awas Yojana CLSS Scheme.
Criteria for getting tax benefits
One can only avail of the above tax benefits if he has chosen the old tax system. The benefit is not available in the new tax system.
According to the Income Tax Act, you can avail of tax benefits on home loans under these sections.
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Section 24(b)- Under this, you get a deduction on interest. You can avail tax deduction on annual home loan interest up to Rs 2 lakh. However, this deduction is available only on self-occupied properties. There is no limit for non-self-occupied property.
Section 80C: Under 80c, a homebuyer gets the benefit of a deduction on the principal amount. One can avail of the benefit of a tax deduction of Rs 1.5 lakh annually on repayment of the loan principal amount.
Section 80 EEA: In this, you get a deduction on additional interest. You can take a deduction of up to Rs 1.5 lakh annually on affordable home loan interest.
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Section 80 EE: Under this section, first-time home buyers get the benefit of tax deductions. They can avail of interest deduction of up to Rs 50,000 annually.
