Tax Benefits

Under the Income Tax Act of 1961, Home Loan borrower is entitled to- 

A deduction on the principal repayment under section 80C

Claim tax deduction of up to Rs. 1.50 Lacs on the home loan principal amount. 

The deduction is allowed only after the construction of the property is completed. A completion certificate to be availed for getting this deduction under this section and the property can’t be transferred for a minimum period of 05 years. 

Purpose of Loan:

Purchase | Construction of a new house

A deduction on the interest repayment under section 24B

Claim tax deduction of up to Rs. 2 Lacs on Interest payment of the home loan for a self-occupied property.  

No limit in case the property is not self occupied, rented, or about to be rented. However, if the owner of the property due to his service does not occupy the house and is staying in some other place, then the capping mentioned in point ‘a’ applies. 

Purpose of Loan:

Purchase | Construction | Repair | Reconstruction of Property

Additional interest tax benefit for first-time homebuyers under section 80EE

A further deduction of Rs. 50000 is allowed for first-time property buyers. This will be in addition to a deduction of Rs. 1.50 Lacs under section 80C & Rs. 2 Lacs under section 24B.

The value of the property should be Rs. 50 Lacs or less and the amount of acquired home loan should be Rs. 35 Lacs or less.

Purpose of Loan:

Purchase of Residential House 

Tax Deduction benefit under PMAY ( Pradhan Mantri Awas Yojana – CLSS scheme) under section 80EEA

A deduction of Rs. 1.50 Lacs is given on the interest paid on home loans for affordable housing. 

The stamp duty of the property should not be above 45 Lacs and one should not be eligible to claim deduction under section 80EE of the Income Tax Act.

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