In today’s times when home loan rates are very low, real estate prices have also come down. In March month states like Maharashtra and Karnataka have also reduced stamp duty.
On Women’s Day (March 8), these states also reduced stamp duty for women home buyers.
Experts tell that if you are also planning to buy a property, then this time is very good. Not only this, you can also get some income tax benefits by taking a home loan to buy a property.
Here we are going to tell you about five such benefits that you can get in income tax by taking home loan.
Tax concession on principal and interest
An individual can claim two types of tax breaks. Reduction in repayment of principal of home loan under section 80C and reduction in interest paid on home loan under section 24.
In case of own property on the second route, there is a limit of Rs 2 lakh per annum. If you buy a house in the budget, you will get a deduction of Rs 1.5 lakh in a financial year under Section 80EEA.
This deduction is in addition to Rs 2 lakh on the interest component. It is to be noted here that this will be applicable to only those home loans which have been taken for residential house between April 1, 2019 to March 31, 2021 and whose stamp duty does not exceed 45 lakhs.
Under construction property can be better
If you want to buy a house, then it can prove to be better to choose a property on which work is already going on. Income tax rules allow you to claim the entire interest paid during the pre-delivery period.
This is reduced to you in five equal installments starting from the financial year in which the construction is completed or you have acquired the property.
In case of self-acquired property, the maximum deduction you can claim per annum is Rs 2 lakh. At the same time, you can also get an additional reduction of Rs 1.5 lakh in interest for your first house.
The more people the better
If you buy a house jointly, such as with your spouse, then both of you can get a deduction of up to Rs 2 lakh in the interest that both will pay today.
If there is an adult in your family other than you, and your child also works and the bank is ready to distribute the loan among the three, then all three of you can get a deduction of up to Rs 2 lakh each for self-acquired property.
What to do if you have a second house of your own
No notable rent will be charged on the taxable income of your second self-occupied residential property. That way if you don’t find a ready tenant it works for you to keep this property ‘self-occupied’.
This benefit is available only up to a maximum of two houses. The third house which is not let out will also be taxed according to its deemed value or potential market rent.
How to deal with residential property damage
The entire loss from residential property can be set off against any other source of income like salary. However, the limit for this is Rs 2 lakh.
If you are not able to determine the interest of Rs 2 lakh against any source of income, such surplus interest can be carried forward for eight assessment years. Moreover, this situation is possible only on income from residential property.
0 comments