You can save up to Rs 5 lakh on the mortgage, here’s how

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Buying a home is everyone’s dream. People are saving money so that they can shelter their families. The government also wants you to buy a house, which is why it also grants various tax exemptions on home loans. In other words, by buying a house through a home loan, your dream of owning a house comes true and you also save a lot of taxes.

If you learn this before buying a house, you can save up to Rs 5 lakh per year.

1. Tax exemption on the principal amount

You can claim a tax exemption under 80C on the main part of the mortgage. The maximum limit of 80C is Rs 1.5 lakh, i.e. every year you can save up to Rs 1.5 lakh as tax under 80C. However, it should be noted that you cannot sell this property for 5 years after taking possession of it, otherwise any deductions or exemptions you took before that will be added to your income.

2. Tax exemption on interest on mortgage loans

If you pay the EMI on a home loan, it has two parts, the first payment of interest and the second repayment of principal. In this, the interest part may be exempt under Article 24 of the income tax. Thereupon, a discount of up to Rs 2 lakh is available each year.

The interesting thing is that if you live in this house you can only claim up to 2 lakhs, but if you rented it out you can get interest reduction as much as you want it there is no upper limit. But keep in mind that the rent you collect will be part of the home’s ownership income, which you will have to pay taxes on. You start to benefit from this exemption from the year in which the construction is completed.

3. Tax exemption of interest before construction

This question comes to the minds of many people that if we took out a home loan today, but the construction of the property is completed after 3 or 4 years from today, then we will not get no deduction on interest paid on the loan in the meantime. Because the deduction provided for in section 24 will be available from the year the construction is completed. So the answer is that you will also get a tax exemption on interest paid during the pre-construction phase, this is called pre-construction interest. Whatever interest you paid during this period, you can claim it in five equal parts. That is, you can claim 20% every year. But this amount also cannot exceed Rs 2 lakh per year, even if the existing interest is added to it.

At each stage of the purchase of a house, you benefit from the possibility of tax exemption. You can also apply for house registration and stamp duty paid under section 80C, on which you can get tax exemption of up to Rs 1.5 lakh. But it can be claimed in the same year in which these two expenses are incurred, after which you can no longer claim it.

5. Additional exemption under section 80EE

Apart from this, you can also qualify for an additional exemption of Rs 50,000 under Article 80EE of income tax. But it has certain conditions. The first condition is that the maximum loan against the property must be 35 lakhs or less, and that the total value of the property must not exceed 50 lakhs. This loan should have been sanctioned between April 1, 2016 and March 31, 2017. This should be your first home, before that you should not have another home. The 80EE was revived by the government, before that it was introduced for two years in fiscal years 2013-14 and 2014-15.

6. Additional tax exemption under article 80EEA

For affordable housing, the government has extended the additional interest exemption of Rs 1.5 lakh for one year on February 1, 2021. You can now take advantage of this exemption until March 31, 2022. This exemption will be added to Rs 2 lakh tax exemption available. under Article 24 (b). In other words, you can save a total tax of Rs 3.5 lakh on interest.

But there are also certain conditions for this. The first condition is that the value of the property does not exceed Rs 45 lakh. The second condition is that the mortgage is sanctioned between April 1, 2019 and March 31, 2020. Third condition, it must be the first property of the purchaser. In addition, the buyer should not benefit from an exemption under the 80EE standard.


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