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ITR Filing for Home Loan_WC

When it comes to filing the Income Tax Return (ITR) for Home Loan tax exemptions, understanding the different deductions applicable to you as a borrower is important. The most important deductions for Home Loans are under Section 24(B) and 80(C) for interest payments and principal repayment, respectively. There are other exemptions too that fall under Section 80EE.

The process of filing your ITR for deductions on your Housing Loan is simple. Keep the necessary documents handy to complete the process for ITR filing. Once you are prepared, here are the steps to follow.

1: Documents Required for ITR Filing

These include:

  • Property ownership documents
  • Certificate of purchase or construction 
  • Home Loan certificate with interest and principal details 
  • Municipal taxes receipt 
  • Financial and personal documents of the taxpayer 

2:  Submit the documents to your employer

  • Inform the employer to make TDS adjustments
  • This compliance is not mandatory for freelancers or self-employed Home Loan borrowers

3:  Calculate your Home Loan deductions

  • Separate deductions are allowed on self-occupied and let-out properties 
  • Consult with a CA or your financial advisor before making your maximum deduction claim 

4:  Claim the actual deductions

  • Once you have completed all the necessary steps, visit the official Income Tax website to follow their instructions and complete your Home Loan tax submission
  • Download your tax statement for verification 

An important reason to file tax returns on time is that it is a key requirement for credit facilities such as a Home Loan. In fact, you can easily avail of a  Bajaj Housing Finance Home Loan  if you have all the required documentation available. The loan has many features like basic eligibility terms, quick processing and more, allowing you to borrow based on your need and comfort.

*Terms and conditions apply

Read Also: Different Types of ITR Forms in India

Tax Benefits on ITR Filing for Home Loan Under Different Sections

Tax Benefits on ITR Filing for Home Loan Under Different Sections

​​​Listed below are some of the tax benefits for Home Loan borrowers available under various sections of the Income Tax Act:​​

​​​Section 24:​​

​​​Any borrower is eligible to claim this deduction on the interest component of the home loan up to a maximum amount of Rs.2 lakh in a financial year. However, if the property is rented out, the entire interest component on the principal value shall be allowed as a deduction. ​​

​​​Full tax deduction on ITR filing for Home Loan is allowed if the assessee has borrowed the amount for the purpose of acquisition or construction of a house property. However, if it is for the purpose of repairs and reconstructions, the maximum deduction is limited to Rs.30,000.​​

Section 80C: ​​

Any borrower is eligible to claim deductions on the repayment of the principal component or registration charges and stamp duty. The property can be either self-occupied or let out and qualify for a maximum deduction limit of Rs.1.5 lakh in a financial year. To claim this deduction, the borrower cannot sell their property within 5 years of possessing it.​​

​​​Section 80EE:​​

​​​Any first-time borrower exhausting the Section 24 deduction limit was eligible to claim a deduction of up to Rs.50,000 under this section for a certain period. It is only available to Home Loans sanctioned between 1st April 2016 and 31st March 2017; the loan amount has to be Rs.35 lakh or less.​​

​​​Section 80EEA:​​

​​​Any first-time borrower after exhausting the Section 24 deduction limit could avail a deduction of Rs.1.5 lakh under Section 80EEA. This deduction is only available for loans sanctioned between 1st April 2019 and 31st March 2022. Moreover, the stamp duty amount of the property should be Rs.45 lakh or less and the borrower availing deduction under Section 80EE should not be eligible for Section 80EEA deduction. ​​

Frequently Ask Questions_ITR_WC

Frequently Asked Question

ITR-1 form, also known as ITR-1 Sahaj form, is an income tax return filing form to file the income tax. ITR-1 form is for individuals with total income not exceeding Rs.50 Lakh. It is most commonly used by salaried individuals. Ineligible applicants for ITR form are Resident Not Ordinarily Resident (RNOR) and Non-Resident Indians (NRI). Individuals having agricultural income greater than Rs.5,000 are also ineligible. Individuals with more than Rs.50 Lakh of income are also not eligible. Income derived from lottery, legal gambling, etc. doesn’t qualify for ITR-1 form. Income from business also not eligible for ITR-1 form.

There are a number of reasons why lenders ask for ITR. ITR help lenders to understand your cash flow and income. It determines your financial stability. Lenders typically ask last 3 years of ITR returns. It gives them a brief overview of your income and credit behavior. If you have defaulted on any payments, it might indicate that you will most likely miss on EMIs too. Hence, filing an ITR on time pose you as a reliable borrower. Benefits of filing an ITR for a Home Loan on time are easy loan approval, tax benefits, and many more.

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