Income Tax Benefits on Home Loans

Let’s try to understand the tax benefits on home loans in India. Home Loans are one of a better ways for saving on your taxes for a longer duration.

In India you get double TAX benefits on Home Loan.

Tax Benefits on Principal

Under Section 80C, you can get tax deductions up to Rs.1 lakh every year on the principal amount paid.

You can claim Stamp Duty & Registration charges also under Section 80C.

Tax Benefits on Interest

Under Section 24(b), interest component of EMI is eligible for deduction from taxable income if the loan is on a property/house that you are currently living in. you can claim maximum Rs.1.5 lakhs in every financial year.

Loan taken for construction or repairs is also eligible for deductions under Section 24(B).

Example


Suppose your total taxable income is Rs. 4,00,000.
Principal repayment is Rs. 1,50,000 and total Interest Payable is Rs. 1,80,000.


The total deduction allowed is Rs. 2,50,000 (1+1.5Lacs) under above mentioned sections. Hence now your total taxable income becomes only Rs. 1,50,000 (4 - 2.5Lacs).


Take a Joint Home Loan, Buy House with parents/Siblings or spouse as joint owners so that you can get double tax benefits.