Tax Savings On Home Loan: Planning to buy your home? This is how you can double tax savings

Home Loan Tax Savings: Many people think that buying a house by taking a loan is not right, that’s why they invest elsewhere. However, many financial planners recommend buying a home by taking a home loan and paying EMIs instead of recurring investments or SIPs.  However, if you are paying income tax, then buying a house, especially buying a house on loan, can prove to be a profitable deal. Let’s talk about what are the benefits of taking a home loan under the Income Tax Act and how you can double the tax savings?

First of all, know this. Let’s take whether to buy a house or live on rent… What is the justification for this debate. Buying a home, especially the first home, is more of an emotional decision than an investment. Everyone buys the first house for their own living, because own house gives peace of mind in many ways, which is not possible in a rented house. If we look at it from the point of view of income tax, then buying your house is beneficial even in such a situation. In the case of rental, only HRA can be claimed, while there is an opportunity to claim many exemptions when buying a house by taking a loan.

These deductions can be claimed

According to the Income Tax Act Under this, a deduction of up to Rs 1.5 lakh can be taken under section 80C on the repayment of home loan principal amount. Whereas, under section 24(b), a deduction of up to Rs 2 lakh can be claimed on home loan interest. The borrower can claim tax savings of up to Rs 3.5 lakh in a financial year by combining these two.

Double benefit of taking a joint loan

If you are with your wife If you take a joint home loan together, then both of you can claim these benefits separately. In this case, the combined limit will be Rs.3 lakh under section 80C and Rs.4 lakh under section 24(b). That means a total deduction of Rs 7 lakh will be available. This is a move that can make your home loan a tax saving avenue along with asset creation tool.

Key points to keep in mind

However, to avail tax benefits, Some things should be taken care of. The co-borrower of the home loan should also be a co-owner of the property being purchased. If this does not happen, he cannot avail tax benefits. In such cases, he will not be able to get the tax benefit despite being a participant in paying the EMI.

Get the more latest Business news updates

Scroll to Top