Unlock Maximum Tax Benefits with Home Loans
Tax Deductions on Home Loan Interest and Principal
Home loans can be a smart way to save taxes. Under the Income Tax Act of 1961, borrowers can claim deductions on both interest and principal payments:
| Deduction Type | Section of IT Act | Maximum Deduction |
|---|---|---|
| Interest Paid | 24(b) | ₹2,00,000/year |
| Principal Repayment | 80C | ₹1,50,000/year |
These benefits significantly reduce your taxable income, helping you save more every financial year.
Special Benefits for First-Time Homebuyers
First-time buyers get additional advantages. Under Section 80EEA, they can claim an extra deduction of ₹1.5 lakh on interest. This is on top of the existing benefits under Section 24(b) and 80EE. Here are the conditions:
- Loan amount: Less than ₹35 lakh.
- Property value: Does not exceed ₹50 lakh.
These deductions make home loans an excellent tax-saving tool for new buyers.
Subtitle 3: Steps to Maximise Tax Savings
To optimise your tax benefits:
- Ensure the property is registered in your name.
- If it’s a joint loan, become a co-owner to claim shared deductions.
- Submit your interest certificate to your employer for TDS adjustments.
- Make prepayments to reduce interest outlay.
- Consult a tax expert to plan your deductions effectively.
Did You Know?
Women homebuyers enjoy lower interest rates and reduced stamp duty in many states, adding to their savings!
