Introduction: Overview of income tax deductions on home loans for the year 2022 and how it can help you save money.
Are you looking for ways to maximize your tax savings? Well, look no further. Home loans can provide a great opportunity to reduce your tax burden while also helping you build equity in a home of your own.
In this post, we’ll explore the numerous income tax benefits available on home loans in 2021 and 2022, as well as how salaried and self-employed individuals can use these deductions to their advantage.
So if you’re considering investing in property, read on to learn how you can make the most of your income tax advantages!
When it comes to tax deductions for home loans, the key thing to understand is that the deduction is available on the interest payment portion of your loan. The maximum deduction available under section 80C of the Income Tax Act for the year 2022 is Rs 2 lakh.
In terms of eligibility, salaried and self-employed individuals who are paying EMIs are both eligible for this tax benefit. It’s important to note, however, that to avail this deduction, you must have taken out a loan after 31st March 2017.
Income Tax benefits for home Loans
When you buy a home through home Loan can save tax as per the provisions of the income Tax Act. 1961.,The benefits of taking out a home loan depend on a few factors, such as your income and the size of your loan.
The government is always happy to encourage people to buy the home of any Individual’s dream through Home loan and avail income tax benefits .It gives you various multiple tax benefits which can help you save money every year.
If you’re in the 10% or higher tax bracket, you may not be able to claim the deduction, but you can still reduce your tax liability by contributing to a home equity loan or borrowing against your home equity.
Take a look how you can benefit through Housing Loan
New updates union budget (2022-23)
Union Finance Minister Nirmala Sitharaman in the budget speech proposed to extend the deadline for availing additional deductions on interest payment on home loans to 31 March 2024.
This comes after the government had in the previous budget extended the deadline to 31 March 2022.
The extension on home loans till 31 March 2024 is applicable for all home loans sanctioned till 31 March 2022.
Discuss the tax benefits of claiming a home loan as a deduction and it can impact the cost of a home loan
Home Loan Tax Benefits under Section 80C –Repayment of principal amount
Home loan principal is part of Section 80C of the Income Tax Act. Under this section, an individual is entitled to tax deductions on the amount paid as repayment of the principal component on the housing loan. An amount up to Rs. 1.50 lakh can be claimed as tax deductions under Section 80C.
Under Section 80C of the Income Tax Act 1961, you can claim a deduction on the repayment of the principal amount.
This deduction includes the charges you pay for registration and stamp duty on your home. You can avail of a deduction up to a value of Rs 1.5 Lakh under this section.
Section 80C is a popular section among taxpayers as it allows to reduce taxable income up to a maximum deduction of ₹1.5 lakh by making tax-saving investments like life insurance premium or incurring eligible expenses like school tuition fees which are available only for Individuals and HUFs.
It allows for a maximum deduction of up to Rs. 1.5 lakh every year from an investor’s total taxable income. Section 80C of Income Tax Act is applicable only for individual taxpayers and Hindu Undivided Families.
If you were not able to submit the details of your Section 80C deductions to your employer timely, you can claim them in your Income Tax Return. You can claim them during return filing, even though they don’t appear on your Form 16 since you could not intimate your employer
principal repayment Under Section 80C. Under section 80(c) of the Income Tax Act, tax deduction of a maximum amount of up to Rs 1.5 lakh can be availed per financial year on the principal repayment portion of the EMI.
Home Loan Tax Benefits under Section 24 payment of interest.
Home Loan Tax Benefits Under section 24b
Home Loan Tax Benefits under Section 80EE – Additional Deduction
Home Loan Tax Benefits under Section 24 And 80 EE
Home Loan Tax Benefits under Section 80EEA – Interest on Home Loan (First Time Buyers)
Home Loan Tax Benefits under Section 24 and Section 80C – Joint Home Loans on Interest and Principal Amount Payment
Home Loan Tax Benefits under Section 24 and Section 80C – Joint Home Loans on Interest and Principal Amount Payment
Deduction for stamp duty and registration charges
Tax deduction under section 80(c) of the Income Tax Act can be claimed for stamp duty and registration fees as well but it must be within the overall limit of Rs 1.5 lakh applied to principal repayment.
This benefit can be availed regardless of whether you take a home loan or not. Furthermore, this benefit can only be availed in the year these expenses are incurred.
How to Calculate Tax Benefits on Home Loan?
Using Income tax Online portal is the simplest way to determine you income tax benefits on home loan. Go to calculate and enter you home loan information and tabulation will appear.
The information you need is all about:
Loan Amount
Interest Rate
Tenure
Loan start date
Gross Annual Income
Existing Deduction under section 80C/D
Summarize the benefits of taking advantage of tax benefits for a home loan.
Deductions | Section | Maximum Deduction (INR) | Conditions |
Principal | 80c | 1.5 Lakh | House property should not be sold within 5 years of possession. |
Interest | 24b | 2 Lakh | The loan must be taken for the purchase/construction of a w house, and the construction must be completed within 5 years from the end of the financial year in which the loan was taken. |
Interest | 80EE | Rs.50,000 | The amount of loan taken should be Rs 35 lakh or less, and the property’s value does not exceed Rs 50 lakh. |
Stamp Duty | 80C | 1.5 Lakh | It can be claimed only in the year these expenses are incurred. |
Interest | 80EEA | 1.5 Lakh | The stamp value of the property should be Rs.45 lakh or less. The taxpayer is not eligible to claim deduction under Section 80EE. |