How does it like to imagine home loans giving tax benefits, in addition to helping people for decades to buy their dream house? Feels like a dream. But yes, it’s true.
Investing in real estate has been one of the top goals of an average Indian individual. But, the real estate prices are constantly surging to newer heights every now and then. Corresponding to that, EMIs too have a bad reputation in the market. Still, home loans have continuously played their part in bridging the gap between the average individual’s desire and reality.
So, what’s the new benefit in taking home loans?
A person can now be benefitted in two ways by taking a home loan. The principal amount repayment that an individual pay towards a home loan qualifies for the tax deduction under Section 80C of the Income Tax Act. Moreover, an individual can claim up to 2 lakhs as interest deduction from the income for a property by taking a home loan.
The same logic also applies when a person is applying for a second home. If an individual is applying for a second property, only one property will be deemed as self-occupied and claims will be given for that property. Other than that, if a couple has applied for a loan jointly, the tax benefit can be claimed jointly.
In case of properties that are deemed to be let out, the entire amount paid as interest is eligible for tax deduction. From April 2017, there is a cap of 2 lakhs. So, we see that home loans are surely not a burden on a common household anymore.