Tax Benefits on Interest Paid:
Tax Benefit Under section 24 of the Income Tax Act, one can avail the deduction on Home Loan for payment of Interest tax benefit. The self-occupied property allows the deduction with the maximum limit of Rs. 2 lac if it takes the completion within 3 years from the end of the Financial Year, otherwise Rs. 30,000.
Another case here is when the house is not self-occupied. In that scenario, the maximum deduction allowed is restricted to Rs.200000 from FY 2017-18 and the rest amount shall be carried forward for set-off in subsequent years.
Interest amount on home loan is allowed as deduction on an accrual basis under section 24. Here, the payment basis differentiates to that from the Section 80 C in a way that the claim will be there even if the payment has not been made during the whole year while there’s no such thing in the latter.
Tax Benefits on first Home or Self Occupied :
Those with self-occupied property, are currently allowed to claim interest paid up to Rs 2 lac on home loan. This is due to deduction from other parts of income such as salary income or income from any other source only if the construction of the house is completed within 5 years from the end of the financial year in which loan is taken, or else 30,000. Also read – Home Loan Calculator to gain Tax Benefits
Home loans are a boon in fulfilling your desire to build a house you always wished for. Now that there is a positive change in home loan interest rates, your desire to own your own home can now turn into a reality.
Buying a house of your own gives you mental satisfaction and also adds up to providing financial security to your family. Many people achieve their dream of owning a house of their own by taking a home loan but not all are aware of home loan tax benefit.