Do you know the best benefit of taking a house loan? Housing loans are very affordable and effective when it comes to purchasing a property or plot of land. It is easy to get one by meeting home loan eligibility standards. The best part about taking a housing loan is the tax deductions you get annually. 

Home loans are subject to tax benefits, and you are able to get good annual savings upon deduction. The home loan tax benefits are different under various sections and tax slabs. Even with a joint home loan, each of the owners is eligible to apply for tax deductions. A loan for home is surely one of the best tax-saving kinds of loans which helps you save a good deal of funds.

Home Loan Tax Benefits and Tax Deductions

Section 80C deals with principal amount deductions:

  • Under the tax 80 section, it is applicable to both self-occupied and properties that are given on let out or rented. Individuals can claim tax deductions of up to 1.5 lakh per year.Every year, the taxable income falls under the principal repayment amount. The tax deduction in a housing loan actually happens on the principal loan amount and not the home loan interest rate, which you pay.
  • The stamp duty and the registration charges are included in the taxation. However, you can only get the stamp duty tax deduction once. You are not permitted to claim it more than once.
  • To claim tax deductions on housing loans, it is important for your property to be constructed completely. You cannot get tax benefits unless the property is constructed.
  • You can only get tax benefits and deductions if you do not sell your property within five years after you are done with possession. For a minimum of five years, you need to have the property in order to enjoy tax deductions.
  • If the individuals sell the property within five years, any tax deduction that is claimed will be reversed. It will be reversed back in the very year that you sell the property. Furthermore, the particular amount will also be added to the income in that same particular year.

Section 80EE Tax Benefits

  • Under this housing loan section, you can enjoy tax benefits of around Rs. 1.5 lakh, applicable only on the interest rate that you pay annually. This tax section is not applicable to the housing loan principal amount. It is applicable only to the interest amount.
  • The benefit is available only when the property is more than 45 lakh. 

Home Loan Income Tax Benefits in 2021

For the interest paid on housing loans for affordable properties, you always get an additional tax deduction of 1.5 lakh rupees. For the period between March 31st and April 30th, 2022, the total tax deduction can be up to 7 lakh.

Deduction for Joint Mortgage

Joint housing loans are very popular nowadays. It has two co-applicants on the housing loan. When the home loan is taken by more than a single person, each of them is eligible to claim the tax deduction on the interest paid up to Rs. 2 lakh each. It is also easy to apply a tax deduction on the principal loan amount. However, individuals under joint housing loans should be owners of the property.

Finishing up

If you need a home loan for salaried, make sure you meet the home loan eligibility criteria. Enjoy the tax benefits applicable to housing loans with a low home loan interest rate.