Income Tax deduction for interest on Home Loan
Buying a house is a dream for most Indians and if it happens to be your first home, it makes it more special. Affordable housing and home loans have helped many Indians realise their dreams of owning a house.
There are other schemes through which first home buyers can benefit such as section 80E allows tax benefits for first time buyers. The interest paid for home loans can be claimed till the entire home loan amount is repaid and an additional benefit that of Rs. 50,000 can be claimed from the year 2016.The maximum allowable deduction for home loans interest is Rs 200,000.
Let us look at the home loan tax benefits for the year 2017-2018 in detail
Following are the key highlights of the year.
• Principal up to a maximum of INR One Lakh Fifty Thousand (1,50,000) repaid can be claimed as investment eligible for tax deduction under section 80C
• The principal up to a maximum of INR Two Lakh repaid can be claimed as investment for senior citizen can be claimed as tax deduction under section 80C
• INR Thirty Thousand (30,000) can be claimed on interest paid for first time buyers
• Additional exemption of INR Fifty Thousand on interest on housing loans amount greater than INR thirty-five lakhs and lesser than INR fifty lakhs
• There are no tax benefits on principal repaid for the purchase of a second home or other additional property.
• There are no tax benefits on principal repaid for purchase of a house which is under construction
• Interest paid on home loans for property under construction can be claimed
• If the property is partly self-occupied and partly rented out then the interest must be split in a manner which is proportionate to the occupancy.
• Tax benefits claimed for properties with home loans for more than one borrower, each borrower can claim individual benefit up to INR One Lakh Fifty Thousand Rupees.
It would do well if prospective home buyers keep these points in mind before applying for a home loan. Check out CreditMantri to get the best loan offers from multiple lenders and avail the home loan that is right for you