Tax Rebate: Many public and private banks of the country are providing home loans till March 31 at an interest rate of 6.65% to 6.70%. According to the banks, this is the lowest interest rate in 10 years. That is, you can fulfill your dream home by paying less EMI.
Not only this, you can also get income tax rebate of five lakh rupees after taking a home loan. This will also save you. Let us know how you can get the tax exemption benefit of five lakh rupees.
1.5 lakh exemption under section 80C
The monthly installment (EMI) of a home loan has two parts. The first is the payment of principal and the second is the payment of interest. You can claim exemption under Section 80C of Income Tax on payment of principal. You can claim a tax rebate of Rs 1.5 lakh on the principal payment of a home loan.
Also, Read This: Refund not received yet after filing ITR, check these 4 things
2 lakh tax rebate on interest payment
You can also claim tax exemption on payment of home loan interest. There is a tax exemption under Section 24 on the payment of home loan interest. You can take a discount of up to a maximum of 2 lakh rupees in any one financial year. There is no benefit on interest payment of more than two lakh rupees. If you have two houses and parents live in the second house, then there is a benefit of exemption under Section 24 on the interest of the home loan of the second house.
Separate discount on affordable home
If you buy affordable category homes, you can get additional tax rebate on the payment of home loan interest. This exemption can be claimed under Section 80 EEA. The maximum amount for this has been kept at Rs 1.5 lakh. This exemption is different from the exemption of Rs 2 lakh under Section 24. In this way, if a buyer is buying a house under the affordable housing category, then he can claim a tax rebate of up to Rs 3.5 lakh.
Some conditions for taking discount on Affordable House
-Home loan should be taken from financial institutions like bank or NBFC
– Home loan is required to be taken between 1 April 2019 to 31 March 2021
– Stamp duty for buying a house should not be more than Rs. 45 lakhs.
– There should not be any house already in the name of the person taking the loan
– The tax deductor should not be eligible to claim under section 80EE
Exemption under section 80EE
The rebate was introduced in the financial year 2016-17 for people purchasing homes for the first time. In the financial year 2016-17, the taxpayer taking home loan has been allowed an additional tax exemption of up to Rs 50,000 under Section 80EE. This exemption is different from Rs 2 lakh available under section 24. However, this discount is only available to first-time buyers. In this way, if all the home loan-related discounts are merged, then you can get a maximum discount of up to 5 lakh rupees.
