Learn how you can invest in better Tax Saving Home Loans
A loan taken, either from an employer, a friend
or a private lender is eligible for deduction over interest rates. Before 2017
Budget, the loss from housing and properties rented, i.e., home loan interest
rates can be revised and adjusted on the remainder of income without any
restriction or limit. This helps reduce tax liability to a great extent.
Taxpayers consider property investment as a mean to tax planning while
establishing a long term major financial asset in one’s entire lifetime.
Here’s what you need to consider: It is
beneficial to book or invest in an under construction property to help claim
total interest paid as a deduction during the pre-delivery period in the form
of five installments. These installments can be waived off from the starting
financial year in which the construction was completed or when the individual
acquired the property. The maximum deduction amount that can be claimed is 2 lakhs,
in case of self-occupied properties.
For instance, if you intend to jointly purchase
the new property with your spouse, then each of the individual are entitled to
maximum deduction of 2 lakh rupees per year for the interest funded by each of
you.
If a person owns a second home, it is advised to
rent it than keeping it empty for better tax benefits. Second house may attract tax on a deemed value if kept empty. This
means that taxes are calculated at expected market rent.
Although, no deduction income is allowed towards
repair and maintenance repair, a standard 30% deduction of gross value is
allowed to compensate the said repair and maintenance expenditure of the
housing property.
Tax Benefits on
Principal Amount:
EMIs are generally divided into the interest paid
and principal amount that you took as loan. A deduction with an overall cap of
1.5 lakh as deduction on gross total income is allowed on eligible investments
Income tax saving is a must in today’s times and
with this guide on home loan tax benefits, you can save up on your finances and
invest to reap better tax benefits on housing.