Purchasing a house for yourself and your loved ones is one of the biggest investments that you will probably make in your entire lifetime. It is a very big decision to buy a house because not only you spend a lot of money, but also it becomes an asset to you. Everyone wants to own a house and in today’s world, buying a house is more of a necessity than a luxury.
Buying a home requires lots of funding. You may go ahead and shell out your savings on buying your dream home. However, if you do not wish to buy the house using your savings or don’t have enough saved up, you may choose to go for a home loan. A home loan offers you the lump sum money that you need to buy your house. You must understand that the loan will not cover the entire value of the property. Around 80-85% of the property value will be taken care of by the loan and the remaining 15-20% must be paid by you as down payment.
If you choose to opt for a home loan, you will have to ensure that you make the monthly payments on time towards the debt. Ensure that you have enough cash flow every month so that you can manage your finances well.
In order to avail a loan from a bank or an NBFC, you must meet the eligibility criteria set by them. You must have a steady source of income, a good credit score, etc. If you meet the criteria and all your documents are in place, you can easily avail the home loan.
A home loan not only helps you buy a house, but it also comes with several other perks. One such perk is called Home Loan Income Tax Benefit. Let us talk about the tax benefits that can be availed under the prevailing Income Tax laws.
Buying a home requires lots of funding. You may go ahead and shell out your savings on buying your dream home. However, if you do not wish to buy the house using your savings or don’t have enough saved up, you may choose to go for a home loan. A home loan offers you the lump sum money that you need to buy your house. You must understand that the loan will not cover the entire value of the property. Around 80-85% of the property value will be taken care of by the loan and the remaining 15-20% must be paid by you as down payment.
If you choose to opt for a home loan, you will have to ensure that you make the monthly payments on time towards the debt. Ensure that you have enough cash flow every month so that you can manage your finances well.
In order to avail a loan from a bank or an NBFC, you must meet the eligibility criteria set by them. You must have a steady source of income, a good credit score, etc. If you meet the criteria and all your documents are in place, you can easily avail the home loan.
A home loan not only helps you buy a house, but it also comes with several other perks. One such perk is called Home Loan Income Tax Benefit. Let us talk about the tax benefits that can be availed under the prevailing Income Tax laws.
Tax Benefits On Housing Loans:
Tax Benefits for home loans can be availed under Section 80C, Section 80EE and Section 24 of the Income Tax Laws.
Tax Benefits For Home Loan Under Section 80c:
Under Section 80C of the Income Tax Act, the borrower of the housing loan is allowed to claim tax deduction on the principal amount. Rs.1.5 lakh is the maximum amount that can be claimed under this Section as tax deduction. You must understand that this deduction is the sum total of all the deductions under Section 80C and includes sums invested in fixed deposits, PPFs, Senior Citizens Savings Scheme, National Savings Certificate, etc.
Tax Benefits For Home Loan Under Section 24:
Section 24 of the IT Act allows the borrower of the home loan to claim tax deduction on the interest that is paid towards the housing loan. According to the clauses mentioned under this Section, income from the borrower’s property is reduced by the figure of the interest paid on the housing loan. However, there is a condition for claiming this tax deduction. The home loan must have been taken for the purpose of purchasing a property, construction of the house, repair of the house, reconstruction or remodelling, etc.
Tax Benefits For Home Loan Under Section 80ee:
This Section under the Income Tax Act was reintroduced in the 2016 Union Budget. It has a provision of claiming an additional amount of Rs.50,000 as tax benefit when you take a home loan. This claim can be made on the interest that is paid towards the loan amount. This additional claim is over and above the claim of Rs.1.5 lakh and Rs.2 lakh under Section 80C and Section 24 on the Income Tax Act, respectively.
When Is A Claim Under Section 80ee Valid?
The claim under Section 80EE is allowed if the cost of the property purchased by you is less than Rs.50 lakh and the total value of the property does not exceed an amount of Rs.35 lakh. The deduction benefit can be availed till the time the home loan’s repayment is done.
How To Claim Home Loan Tax Benefits?
In order to claim tax benefits on home loans, you will need to submit the lender’s statement that states the payable amount towards the interest and principal. If the claim is valid, the borrower only has to pay tax on the remaining amount that does not fall under the tax deduction bracket.
Bottom Line:
Choosing a home loan for buying your home can prove to be a great option as it helps you buy the house easily and allows you to save more by claiming tax benefits. Ensure that you do thorough research before investing in a property.
Choosing a home loan for buying your home can prove to be a great option as it helps you buy the house easily and allows you to save more by claiming tax benefits. Ensure that you do thorough research before investing in a property.
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