Home Loans: Way to realize marvels

Indian is a country where emotions play a very important role. Buying and living in own property is one such strong emotion that comes across from every city, village, and state of the country. However, not everyone can afford a home as and when they want.  Government of India has made this possible by allowing the citizens to take loans. These loans are called home loans. They can be taken from any financial institution such as banks. Almost all the banks in India provide this loan. The home loan features do not vary much even when the location changes. Home loan in Delhi and home loan in Mumbai will pretty much be the same, except few changes that vary from banks to banks. Let us look at the tax benefits if one opts for a home loan:

1.  Tax Deduction: The government has framed section 24(b) to give tax deduction benefit to the customers. Under this, the one who takes a home loan can claim a deduction on the interest that is calculated for the home loan. In case the home loan was for an end-user, in that case, the tax deductions up to 2 lakhs can be made. This deduction is only applicable to residential property and not commercial ones.

2. Tax Deduction on the Principal amount: Under section 80(C), a person who has paid the registration and the stamp duty is eligible for a tax deduction of up to 1.5 lakh on the principal at the time of repayment of the loan. You are eligible for this deduction only if you decide to keep the house for the next five years after the possession.  

3. Joint home loan: If you and your spouse are working, it is best to opt for a joint home loan. This has manifold advantages. From getting double tax benefits, the loan amount also increases making you opt for a bigger home. So the tax deduction under this can be jointly calculated and will be 3 lakhs under section 80 (c) on the principal.

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Created on Sep 4th 2019 00:03. Viewed 252 times.

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