Save up to 5 Lakh on Tax Deductions on Housing Loans

There are various tax benefits on a home loan availed for buying a home or renovation of an existing home. According to the Income Tax Act, 1961, benefits can add up to Rs. 5 lakh on principal and interest repayment. This creates a permanent asset of high value, relevant for salaried individuals and efficient tax planning as an added advantage.

Under section 80C, there is eligibility for a deduction of up to Rs. 1.5 lakh annually, repaying the principal amount. Section 80C also allows deductions on investment in various tax saving schemes which include PPF, life insurance, ELSS, and NPS. This deduction is valid for renovation of an existing residential property owned or the buying of a new residential property.

This deduction also includes any expenses incurred such as registration charges, stamp duty, etc., under the Rs. 1.5 lakh limit. This tax deduction, however, can only be claimed in the actual year of expenditure being incurred on the real estate. The deduction will be reversed if the property is sold within a period of 5 years from the purchase date.

Section 24 (b) of the Income Tax Act allows claiming a deduction of Rs. 2 lakh against the interest period. In case of construction that is ongoing, however, this deduction can only be claimed on completion of renovation or construction. This deduction can be claimed for two or more loans and can also be claimed for two or more houses.

Under section 80EEA, a deduction of Rs. 1.5 lakh can be claimed against the interest payable on a home loan. The condition of this deduction is, the loan has been sanctioned by an institution between April 2019 and March 2022. For deduction under this section, the stamp duty value of the property should not exceed Rs. 45 lakh in total.

Prestige Group new Launch Apartment Get More details about Prestige Meridian Park