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In the midst of the current crisis, everyone is looking for ways to save money. Did you know that you can do this with home loans? There are various tax deductions you may be entitled to, so you can claim up to Rs 7 lakh.
SECTION 80C
Under Section 80C of the Income Tax Act, borrowers are entitled to deductions of up to Rs 1.5 lakh for paying the principal component of a mortgage loan. If the loan was obtained to build a property, it will only be eligible if it is completed within five years of obtaining the loan.
SECTION 24B
In Section 24b, you can apply for a tax refund of up to Rs 2 lakh on the amount of the mortgage interest. However, this upper limit does not apply to rental properties.
SECTIONS 80EE and 80EEA
First-time buyers can take advantage of Section 80EE, which has a Rs 50,000 deduction in Political North, new ones belonging to relationships under 24b will be Rs 2 Lakh. For borrowers considering competent housing, the personal contact section is 80EEA at Rs 1.5 lakh.
It should also be requested that the stamp duty pertains to a maximum of Rs 45 lakh.
Joint home loans improve your eligibility criteria as both parties can claim capital and interest tax deductions individually and you can earn up to Rs 7 lakh.
Make sure the property documents are in order and reflect your ownership. In the case of joint ownership, the documents must clearly indicate the percentage of their participation.
The completion date of the construction or purchase of the property should be clear, as the tax deduction will be applied based on this data.
Your status as the primary or co-borrower must be indicated.
Request a certificate from the bank detailing your principal and interest.
Make sure you have paid local taxes, if any, to be eligible for the deduction.
Send the documents to your employer to adjust the TDS.
