Tax Benefits On Home Loan Interest | Income Tax Benefits in FY 2016-2017

Tax Benefits On Home Loan Interest

Income tax is that percentage of your income which you pay to the government for fund infrastructural development though which government jurisdiction the whole country and accomplished the requirements of public. These taxes are taken from the people as per their salary income and strength administration provides various types of concession in it Tax Benefits in FY 2016-2017 is one of them. If you have taken home loan you can avail the Tax Benefits On Home Loan Interest, lets discuss all the factors.

Tax Benefits On Home Loan Interest

Customers can claim deductions in their income tax alongside principal and interest payments that they make towards repayment of their home loans so save tax on your income by taking a home loan. The amount of income tax deduction is governed by “Income Tax Laws of Government of India”.

Income Types Or Taxable Heads Of Income

  • Income From Salaries
  • Income from House Property
  • Profits and Gains Of Business or Profession
  • Income from Capital Gains
  • Income from Other Sources

Tax Deduction On Home Loan Self-Occupied Property

Nature What to claim in FY 2016-17 Maximum amount that can be claimed Section applicable
Home Loan interest Interest portion of home loan EMI for the year Rs 2,00,000 Section 24
Principal repayment Principal portion of home loan EMI for the year Rs 1,50,000 Section 80C
Other charges Stamp Duty and registration charges paid during the year Rs 1,50,000 Section 80C
Pre-construction interest 1/5th of Total preconstruction interest Within Rs 2,00,000 above Section 24

Deduction On Interest

If you have purchased the house and paying EMIs for a home loan, you will avail interest component in the EMI that can be claimed as deduction. If you are an owner and a co-borrower both in loan case then you have a right to claim tax benefits. When the construction of the house is completed, you’re deduction claimed can be started in that year. For examples the construction of your house was completed on April 30, 2016, you are able to claim deduction for interest entire 12 months in financial year 2016-2017.

Deduction Under Section 80EE

The Section 80EE provides tax benefit to first time home owners when the house value of the customer is Rs. 40 lakh or less and Rs. 25 lakh or fewer amounts is taken for loan. The deduction can be claimed if the loan has been sanctioned amidst the Financial Year. Under this section you will get maximum deduction of Rs. 1 lakh only when you claimed in the financial year. If the customers meet all the conditions laid out in the Section 80EE, you are able attain this avail.

  • Self occupied property- 50,000
  • Non – Self occupied property- 50,000 

Deduction Under Section 24

The Section 24 work for on housing loans which are exempt from taxation. You are eligible to claimed as deductions per year for the amount up to Rs.2,00,000. It is applicable for self occupied properties. Those rented out properties which received 30% of rent and municipal taxes are able to get benefit of tax exemption.

  • Self occupied property – 2,00,000
  • Non – Self occupied property – No Limit

Under Section 24Quantum of Deduction allowed for Interest on Home Loan

Self Occupied Property
Completed within 3 years Rs. 1,50,000
Not completed within 3 years Rs. 30,000
Not Self Occupied Property
Not completed within 3 years No Limit
Not Self Occupied Property No Limit

Deduction Under Section 80C

This section is applicable for only individuals and Hindu Undivided Family (HUF). Section 80C allows for convinced investments like as NSC and expenditures, it allowed two types of taxation which are mentioned as below;

  • Self occupied property – 1,50,000
  • Non – Self occupied property – 1,50,000

Deduction On Pre-Construction Interest

You are able to start claiming pre-construction interest when the construction is accomplished, while in the financial year the deduction for interest may be claimed. When the house is being used by you, the total deduction must not exceed than Rs. 2 lakh. Customers should add up the entire pre-construction interest and claim it between the five installments. 

Deduction Under Section 80U

As per Section 80U, customer can get flat deduction on income tax that is only for disabled people. But they acquire this avail when they have proof of certificate of their disability. The amount Up to Rs.1,00,000 may be non-taxed but its depends on the severity of the disability.

Deduction On Principal Repayment

Under Section 80C of the Income Tax Act, The component of your EMI goes towards principal is eligible to claim. But the maximum claim as deduction of Rs. 1.5 lakh is possible under Section 80C.

Deduction On Stamp Duty And Registration Charges

Customers are allowed to get deduction towards stamp duty and registration charges they can eligible to claim under Section 80C. But this claimed is only possible in the year in which these were paid.

Particulars Section 24 Section 80C
Tax Deduction allowed for Interest Principal
Basis of Tax Deduction Accrual basis Paid basis
Quantum of Tax Deduction allowed Self Occupied Property’s. 2,00,000Non Self Occupied Property: No Limit Rs. 1,50,000
Purpose of Loan Purchase/ Construction/ Repair/ Renewal/ Reconstruction of a Residential House Property Purchase / Construction of a new House Property
Eligibility for claiming Tax deduction Purchase/ Construction should be completed within 3 years Nil
Restriction on Sale of Property Nil Tax Deduction claimed would be reversed if Property sold within 5 year

Income tax suggested the mean of taxation like capital gains tax, securities transaction tax, etc and many other indirect taxes as VAT, service etc. you can get many benefits of deduction on tax if you consist  home loan.

 

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