Tax Benefits: If you have taken a home loan or are building a house, you can save tax of Rs 2.50 lakh…
Under the Income Tax Act, of 1961, Indian taxpayers get many types of tax benefits. Not only are there tax exemptions on allowances and investments, but provisions have been made in the income tax rules to reduce your tax liability even after taking into account some of your major expenses. This also includes benefits like home loan tax benefits and tax exemption on under-construction property. There are many sections and conditions related to home loans and property construction. Let us know.
Tax exemption on home loan interest (Section 24)
If you have taken a loan to build a house, you can claim tax exemption on the interest paid on the loan. This exemption can also be availed for the property being used for your use, the maximum exemption that can be availed is ₹ 2 lakh per annum. However, if the property is given on rent, you get tax exemption on the entire interest.
Tax exemption on principal amount (Section 80C)
You can claim tax exemption on repayment of the home loan principal amount. This exemption comes within the total exemption limit of ₹ 1.5 lakh annually.
Tax exemption on registration fees (Section 80C)
The registration fee paid while purchasing the property also provides income tax exemption under 80C.
For first-time home buyers (Section 80EE)
First-time home buyers can also get additional discounts. On top of the exemption of Rs 2 lakh available under Section 24b, you can avail of an additional exemption of Rs 50,000 on the interest on your home loan.
Tax exemption for joint-owners
If you are a joint owner of a property or have taken a joint home loan as a joint borrower with someone, then both owners can claim tax exemption for separate partnerships.
What are the conditions of tax exemption on the construction of a house (Tax benefit for under-construction property)
If you want to claim a tax deduction for under-construction property, then you can get a tax deduction up to Rs 2 lakh on the interest paid in a year and up to Rs 1.5 lakh under Section 80C. This rebate on interest can be availed after the construction of the house is completed, for this, the construction must be completed within 5 years. This deduction can be claimed in 5 installments. If the house is not constructed within these 5 years, you will be able to get a rebate of only Rs 30,000 on the interest paid.
