Owning a home is a dream for many; however, rising property rates and inflation has made it difficult for people to realise this dream. Availing of a Home Loan makes it easier for most Indians to buy the property they want, and even save in terms of their taxes. The government makes rebate provisions under the Income Tax Act, to continue the moment in the real estate sector.
Section 24 assists in claiming tax benefits on the interest component of your Home Loan repayment. This section is applicable in the following scenarios:
- If you don’t have a self-occupied property, then you can claim the entire interest payable as a deduction
- To claim tax deductions per Section 24 of income tax, a Home Loan borrower needs to have availed of the loan after 1 April 1999
- It is mandatory to complete the acquisition or construction of the property within 5 years
- For self-occupied properties, one can claim an interest subsidy up to Rs.2 Lakh.
- For a rented residential property, one can claim a complete waiver on the interest paid on a Home Loan up to only Rs.2 Lakh.
- The interest claimed must be calculated on an accrual basis, i.e., this amount has to be actual amount that you have paid as Home Loan interest.
- Joint Home Loan Borrowers can claim a rebate of up to Rs.2 Lakh each, provided they contribute to the EMI payments, and are the co-owners of the property.
Note that homebuyers who have funded the purchase of their property out of their own pocket are also eligible for claims under Section 24B (not applicable on self-occupied properties).
Taxpayers must keep their Home Loan interest certificates handy, which serves as a proof for the interest paid. If any of the mentioned terms and conditions are not met, the deduction per section 24 of the income tax act on the interest is then limited to Rs.30,000 .
*Terms and conditions apply
Also Read: How to File ITR for Home Loan?
