The home loan is now becoming everybody's part of life because buying a home loan in the inflation period is so difficult and we cannot only rely on our savings if we have stable income monthly then the home loan is the best idea. What if we can save our side by side by availing home loans? Yes, it can be possible. We can get tax benefits of availing home loans.
Tax benefits on the home loan
- Under Section 80C
Section 80C of the income tax Act 1956 covers various benefits in which a taxpayer can save up to 105 lakh amount they can avail this much amount deduction from their taxable income. This includes repayment of the loan, investment in PF, PPF, etc. When it comes to EMIS called equated monthly installments then it is divided into two parts principal amount and interest rate amount. You are eligible for the deduction for tax benefits on home loans only upon principal component under the section.
- Under section 24
Under this section, your tax deduction can be avail from the interest rate amount. You can avail up to 2 lakh of the tax deduction under this section. If your property is self-occupied then the amount will be up to 2 Lakhs but if the property is rented out then it will be unlimited.
Documentation: The lender usually provides a certificate of the statistics of the tax amount paid. That you have to show to claim the tax benefits.
Read More: Follow This Simple Process to avail an Affordable Home Loan
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