Taxpayers can avail tax deduction in many ways under the old tax regime through a home loan. At the same time, tax rates (tax rates) will be reduced if you choose a new system of income tax, but you will have to give up any tax benefits. Let us know how tax exemption can be availed through home loan?
New Delhi. Budget 2021 is being discussed in the country’s Parliament these days. During this time, the budgetary announcements made by Finance Minister Nirmala Sitharaman are being discussed. Explain that a new tax slab has been announced for income tax payers in the budget. However, this has been kept optional now i.e. taxpayers can also decide their tax liability under the existing tax system. Under the current tax system, if the salaried income tax payer’s annual income is more than 2.5 lakh rupees, then it comes under the income tax. However, income up to Rs 5 lakh can be tax free through rebate benefit. Income tax law gives tax exemption to individual tax payers and companies in many ways. Through these home loans, you can save tax under many sections.
Exemption under repayment of principal amount under Section 80C
On repayment of the principal amount of the home loan, a claim for tax exemption of up to Rs 1.5 lakh can be claimed under Section 80C of the Income Tax Act. Explain that the construction of the property should be completed within 5 years from the end of the financial year of the borrower. If the property is transferred or sold within 5 years, then the tax deduction claimed will be added to your income in the year of sale. Then income tax will be levied as per your existing tax slab.
will get up to Rs 2 lakh on home loan interest.
Interest on home loan is placed in two categories like pre-construction interest and post-construction interest. Tax deduction of up to 2 lakh rupees is available under Section 24B for the interest paid after the completion of construction. This exemption can be claimed from the year of construction of the house. However, most people take home lanes for properties under construction. After completion of the work, they get possession of it. However, the payment of home loan starts soon after taking the loan. For such people, under Section 24B, tax rebate can be given for 5 years on interest up to 5 years before the construction is completed. If a buyer is buying a house under the affordable housing category, then he can claim deduction up to Rs 3.5 lakh.
till 31 March 2021 Section-80EEA benefit
In Budget 2019, an additional rebate of 1.5 lakh rupees was announced on the interest payment of the home loan taken between 1 April 2019 and 31 March 2020. Under Section 80 EEA of the Income Tax Act, the value of the property should be up to 45 lakh rupees for tax exemption. This benefit can only be taken by a person buying a house for the first time. Its benefit has been extended again for one year in the budget 2020. Now under this, the benefit of tax exemption will be available till 31 March 2021. You can claim tax exemption on stamp duty, registration charge and other expenses incurred while purchasing the property. For this, there is a limit of Rs 1.5 lakh under Section-80C.