Must know things about home loan tax benefits!
|Home loan tax benefit classes 🙂|
- Home loan borrowers are entitled to tax benefits under Section 80C and Section 24 of the Income Tax Act. These can be claimed by the property’s owner.
- In the case of co-owners, all are entitled to tax benefits provided they are co-borrowers for the home loan too. The limit applies to each co-owner.
- A co-owner, who is not a co-borrower, is not entitled to tax benefits. Similarly, a co-borrower, who is not a co-owner, cannot claim benefits. Which means, to claim tax on property, the person should be both co-borrower and co-owner.
- The tax benefit is shared by each joint owner in proportion to his share in the home loan. It’s important to establish the share for each co-borrower to claim tax benefits.
- The certificate issued by the housing loan company, showing the split between principal and interest for the EMIs paid, is required for claiming tax benefits.
If You Work for a company –
- Submit your home loan interest certificate to your employer for him to adjust tax deductions at source accordingly. This document contains information on your ownership share, borrower details and EMI payments split into interest and principal.
If You Are Self-employed and a Freelancer –
- You don’t have to submit these documents anywhere, not even to the I-T Department. You’ll need them to calculate your advance tax liability for every quarter. You must keep them safely to answer queries that may arise from the I-T Department and for your own records.
If you have another property along with your self-occupied house, and if you let-out that property, you can claim tax deduction for the entire interest amount on the let-out home’s loan. So, the income from that property is calculated from deducting the property tax, standard tax deduction (30%), interest on the let-out property home loan from the annual rental value of the let-out property.
For the first time home buyers, the government provides up to Rs 50,000 tax benefit on loan up to Rs 35 lakh taken for residential house.