Tax benefits on home loan that you can avail in ITR filing
August 1, 2022
CA Chandan Agarwal's Office
ITR filing: If you have a home loan, here are tax benefits that can help you in reducing tax liability.
A home loan or housing loan availed to buy a property can help taxpayers save money every year. In fact, a lot of taxpayers are not fully aware of home loan advantages while filing income tax returns — the due date for which falls on July 31 for filing ITRs for the financial year 2021-2022.
Under several sections of income tax laws, a home loan or housing loan can be used to avail following deductions from the total income:
Section 24
All homebuyers can claim a deduction of up to Rs 2 lakh under the head ‘House property’, said Ruchika Bhagat, MD, Neeraj Bhagat & Co. In the case of a let-out property, i.e., the interest is waived off.
Section 80C
Homebuyers can claim a deduction for principal repayment, a deduction for stamp duty and registration charges of a let-out or self-occupied property under Section 80C. The total limit, however, is Rs 1.5 lakh.
Section 80EE
Additional deduction under Section 80EE is given to the home buyers for a maximum of up to Rs 50,000. However, this is applicable only when the amount of loan taken is Rs 35 lakh or less, and the property’s value does not exceed Rs 50 lakh. Also, the loan must have been sanctioned between April 1, 2016, to March 31, 2017.
Section 80EEA
Under this, first-time homebuyers after exhausting their limit under Section 24, can claim deductions regarding home loans taken for affordable housing with a limit of Rs 1.50 lakh. The stamp duty of the property should not, however, exceed Rs 45 lakh under this clause. Also, a homebuyer availing of benefits under Section 80EE cannot claim benefits under Section 80EEA.
Deduction for a joint home loan
If the loan is taken jointly and the two are co-owners of the property, each loan holder can claim a deduction for home loan interest up to Rs 2 lakh each and principal repayment under Section 80C up to Rs 1.5 lakh each in their tax returns.
ITR filing: If you have a home loan, here are tax benefits that can help you in reducing tax liability.