The person taking the loan will get the benefit of 2 lakh tax deduction only if the construction of the property is completed within 5 years. If the construction work is not completed within 5 years, then you can claim only 30 thousand rupees.
This can be called a double bonanza. With the purchase of a house, you get a profit of Rs 2 lakh. You will easily be able to get tax exemption of up to Rs 2 lakh on home purchase. This is called tax saving home loan repayment. If the home loan is taken jointly, then both the individuals can claim maximum deduction on the home loan loan.
The benefit of tax exemption is available on home loan EMI to buy a house. You can avail tax exemption under 80C on the part of the principal amount (inclusive of stamp duty and registration charges) in the EMI. If you have a property of your own and have taken a home loan on it, then you can claim deduction on its interest. In such a situation, you can claim a maximum of Rs 2 lakh under section 24(b) of Income Tax. If you have let that property out, then you can also claim deduction on the interest paid on the home loan. For this, you have to fill Form 24(b) of Income Tax.
Which forms of tax claim
If a person has bought a house for the first time, then he gets the facility to claim maximum deduction of Rs 50,000 under 80EE. Similarly, under 80EEA, there is an additional deduction claim facility of Rs 1.5 lakh. However, while filling this form, remember that the stamp value of the property purchased under section 80EEA should not exceed Rs 45 lakh. Also, this loan should have been issued between April 1, 2019 to March 31, 2020. The borrower should not have any other house or residential property as on the date on which the loan is taken.
The most important thing to remember is that the loan borrower will get the benefit of 2 lakh tax deduction only if the construction of the property is completed within 5 years. If the construction work is not completed within 5 years, then you can claim only 30 thousand rupees.
Benefit under 80C
- You can claim 1.5 lakhs per annum on both the types of property in which you live or let a house on rent
- Under this rule, you have to complete the construction of the property in 5 years. Can claim deduction after completion of construction
- After completing the construction within 5 years, the property is not to be sold within the same period
- If the property is sold within 5 years, the deduction will be reversed. The deduction will be reversed in the year the property is sold and the amount of deduction will be added to your income for that year.
- If you are a co-owner or co-borrower, you can claim Rs 1.5 lakh as principal deduction
Stamp duty and registration fee can also be added to the deduction claim under this section.
Benefits available under 80EE
- If you have bought a house for the first time, then you can claim deduction under section 24 and 80C.
- For this you should have taken the loan between April 1, 2016 to March 31, 2017.
- Your property value should be less than Rs 50 lakh
- The home loan should not exceed Rs 35 lakh in any case
- The other residential house property should not be in your name as on the date on which the loan is sanctioned
- You can claim a deduction of Rs 50,000 under this section every year till you make the loan repayment
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