Home loan income tax benefits 2020 – 2021 | home loan tax benefit India | home loan tax exemption

Home loan tax benefit India 2018(FY 2018-19) Assessment year 2017-18 – The home loan is a tool to help you and ensure that you will meet your target amount to buy a home, which is your asset. You can avail a home loan upto 80-90% of the price of that house as a loan to buy it, if you don’t have the entire amount to pay. Home loan is really helpful for those who don’t have enough funds to buy a home, but want to own their home. You can claim income tax benefits on home loan under Section 24, 80EE and 80C. For most customers owing a home is a big thing and it has an added advantage.

That it saves us Income tax The Income tax benefits are divided into two parts:

• Principal repayment under section 80C – Principal amount can be claimed upto the maximum of Rs. 100,000 under Section 80C. This is subject to the maximum level of Rs 150,000 across all 80C investments.

• Home loan interest repayment under Section 24 – Under this section interest amount can be claimed as a deductions. You can claim upto Rs. 200,000 or the actual interest repaid whichever is lower.

You can claim these deductions only if you live in that house. Therefore, if your income falls under the bracket of above 5 lakhs, you can save Rs 50,000 as income tax as your net income will reduce by that much plus you own an asset. But, if you are above 8-10 lakhs salaried and living on rent, you are missing a big opportunity of saving tax and owning a long-term asset. Benefits of having a co-borrower if he/she is earning for Income Tax – If both, husband and wife are working and opting for a home loan as a co-borrower-both the borrowers can claim tax exemptions for share of EMI paid. For claiming income tax deduction, the EMI is divided into the principal and interest paid. Both the borrowers can claim maximum upto Rs 1lakh as tax benefits individually. Example: Guess you have taken a 20 lakh home loan at 9.60% rate of Interest for 20 years. Your loan starts from January 2016 so you can upto ₹ 593742 in 20 years on Income tax. Year wise calculation on savings for the coming years are as follows:

Content updated as on 10 February 2016