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Lesser Known Details About Home Loan Tax Benefits

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Lesser Known Details About Home Loan Tax Benefits

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  1. Housing Loan

  2. Lesser Known Details About Home Loan Tax Benefits

  3. 1. You Get the Tax Benefits Only Once You Get the Possession or the Construction of House Is Complete • Tax benefits for home loans do not start from the day you start paying EMIs. • There is no tax benefit until you get the possession of the house (or the construction of the house is complete). You may be paying your home loan EMIs regularly. However, if you have not got possession of the house, you wouldn’t get any tax benefit for interest and principal payments.

  4. 2. Tax Benefits Are for Purchase of Residential Property • If you have taken a Housing Loan ,renewal or reconstruction of existing property, there is no tax benefit for principal repayment under Section 80C.  Tax benefit under Section 80C is limited to construction or acquisition of the house. • Tax benefit for interest payment for such loans is capped at Rs 30,000 per financial year.

  5. 3. Stamp Duty, Registration Fee and Loan Processing Can Also Be Considered for Tax Benefits • Tax benefits for home loan are not merely restricted to principal repayment and interest payment. Stamp duty and registration fee can be considered for deduction under Section 80C. • Home Loan processing fee can be considered for deduction under Section 24 of the Income Tax Act.

  6. 7. You Get the Tax Benefit for Any Number of Residential Properties • You have taken Housing Loan for three houses. Let’s assume you have got possession for all three houses. One is self-occupied and the remaining two have been let out. • You can claim tax benefits for principal repayment and interest payment for all three houses simultaneously. • However, benefit for principal repayment for all three properties combined is capped at Rs 1.5 lacs under Section 80C. Do note this cap of Rs 1.5 lacs also includes your investments in PPF/EPF, ELSS, tax-saving FDs etc.

  7. 8. In Case of Joint Home Loans, You Have to Be Both Co-Owner and Co-Borrower • If your spouse owns the property and you are paying EMIs, you CANNOT avail tax benefits.  Ownership interest is mandatory if you want to avail tax benefits. • Similarly, if you are paying EMIs for residential property owned by your parents, you wouldn’t get any tax benefit. • Alternatively, you own the property with your spouse and the loan has been taken by your spouse. You are paying the EMIs in her place. You wouldn’t get any tax benefits since you are not a co-borrower in the home loan. Source: http://bit.ly/2cEkRY7

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  9. Click to know more on Housing Loan: https://www.hdfc.com/home-loan-emi-calculator Thank You…

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