Do you know how to get an annual housing loan tax benefit of Rs.5 lakh? - Loan Trivia


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Monday 25 October 2021

Do you know how to get an annual housing loan tax benefit of Rs.5 lakh?

home loan tax benefit
As a first-time borrower, you can get housing loan tax benefits of up to Rs.5 lakh on the housing loan. The tax deductions are applicable on the principal paid, interest paid, stamp duty and registration payment. 

Here is discussed how you can get an annual tax benefit of Rs.5 lakh. 

  • Tax exemption in the principal paid

Under section 80C, individuals can avail of tax benefits of up to Rs.1.5 lakh on the principal amount of the housing loan. However, individuals must note that they cannot sell the property for 5 years after getting the possession; otherwise, the tax benefits they gained would be considered an income for the year of sale.

However, one must note that the tax deductions are also applicable when individuals opt for home loan balance transfer to get a lower interest rate. 

  • Tax exemption in the interest paid

Tax exemption on home loan in India in case of interest paid varies depending on the property status. Such as for completed (self-occupied) property, individuals can claim tax deductions of Rs.2 lakh (under section 24B). On the other hand, for under-construction property, individuals can claim pre-construction interest deductions. 

Here, the interest paid is segregated into 5 instalments with an upper limit of Rs.2 lakh. Additionally, a home loan EMI calculator can help you to strategise your monthly expenditure. 

  • Tax exemption in stamp duty and registration fee

Under section 80C, individuals can claim a tax deduction of up to Rs.1.5 lakh for the stamp duty and registration fee paid for the property.  

Apart from these, first-time home loan borrowers can get an additional deduction of Rs.50,000 under section 80EE and up to Rs.1.5 lakh under section 80EEA on the annual interest payment.

Keeping the housing loan tax benefits in mind, individuals can efficiently save a substantial amount and repay the home loan amount, along with this of you are interested to know about tax benefit on second home loan then you should visit Bajaj Housing Finance official website and get all the information in detail.

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