How can You Claim Tax Benefits on Home Loan

Claim Home Loan Tax Exemption

Many of us often remain confused when it comes to the whole home loan claim income tax aspect. There are several home loan tax benefits that you can obviously avail if you already have a home loan and are paying the current home loan interest rates.

There are home loan tax benefit calculators that you can use to work out how you can save tax on home loans. The key home loan tax benefits are the following-

• Tax benefits on principal repayment of your loan annually up to Rs. 1, 50, 00 under Section 80C. This includes amounts paid towards registration charges and stamp duty. This benefit can be obtained once construction has been completed for the home.

• Tax benefits on interest repaid through your home loan annually are available under Section 24. The maximum deduction is Rs. 2 lakh. In case the home has not been constructed within 3 years from the end of the financial year in which you took loan, only Rs. 30, 000 can be claimed as the deduction. In case the loan has been repaid prior to the home being finished, the amount aggregate eligible for deduction will be claimed in five equal instalments for 5 financial years in succession.

• Section 80EE- There are tax benefits up to Rs. 50, 000 for a financial year for first-time homebuyers subject to certain terms and conditions.

Here’s how you can claim tax benefits

• You have to key in the PPF, LIC Premium, EPF and principal repayment for the home loan and in case you are selling the property before 5 years from the date of repayment, you will have the deductions claimed under Section 80C added to your income again.

• Deductions under Section 24 have to be added.

• Deductions of interest earned on savings bank account under Section 80TTA and under Section 80G have to be added as well.

• Submit your ownership information about the property.

Also Read: Tax Benefits on Home Loan

• Other necessary documents include the loan document certificate which shows the division between the interest and principal amount paid in the EMIs.

• Documents that offer proof of home construction completion or purchase date have to be submitted.

• The loan should be in the name of the taxpayer and documents have to be furnished accordingly.

• Proof has to be furnished for municipal taxes paid in the year.