Tax benefits on home loans: Sections 24, 80EEA and 80C, Home loan repayment consists of 2

 components i.e. principal repayment and interest repayment.

Home loan tax benefits

The following are the benefits of a home loan that can be claimed: -

Section	Deduction allowed	Allowed for
Section 24	Rs. 2,00,000	Interest repayment
Section 80C	Rs. 1,50,000	Principal repayment
Section 80EEA	Rs. 1,50,000	Interest repayment

These sections under which tax benefit can be claimed on home loans are explained below: -

Section 80C: Home Loan Tax Benefit (Basic Amount)

The amount paid by an individual /HUF as principal repayment of a home loan is approved as tax exemption under Section 80C of the Income Tax Act. The maximum is Rs. 1.5 Lakh as the principal amount U/s 80C.

 

This tax deduction includes the total exemption allowed under section 80C and includes the amount invested in the PPF account, tax-saving fixed deposit, equity-oriented mutual fund, national savings certificate, senior citizen savings scheme etc.

However, the repayment of the principal portion of the home loan is allowed under this section only after the completion of the construction of the home loan and the issuance of the certificate of completion.

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Moreover, if you are planning to buy a property under construction because it is priced lower than the completed property, you are also requested to note here that GST is also levied on the property under construction. However, no service tax is levied on properties on which construction has been completed.

 

Home Loan Tax Benefit (Amount of Interest)

Tax rebates on home loan interest can be claimed as deduction U/s 24 and under the newly inserted section 80EEA (as amended by Budget 2020).

 

Section 24: Income tax benefit on interest for purchase/construction of the real estate

Tax benefits on home loans for interest payments are approved as a rebate under Section 24 of the Income Tax Act. It has been taken for the purpose of  construction/repair/renewal/restructuring of the property.

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The maximum tax deduction allowed under section 24(b) to a maximum limit of Rs. 2 lakhs

 

In addition, if the acquisition/construction of the property is not completed within 5 years from the end of the financial year taken, then the interest benefit, in this case, will be reduced from Rs. 2 lakhs to only Rs.50000 (The limit has been increased from 5 years to 5 years from F.Y2019-20).

 

The Finance Act 201, promulgated on February 1, 2001, has the maximum loss limit under head house property that can be set off from other income heads. From the financial year 201-1 financial year, the maximum loss is allowed to set off Rs 2 lakh with income from other heads. The amount that is not set off will be carried over to future years.

 

These new provisions inserted in the Income Tax Act is explained very nicely in this link - the cure of rate property from income tax property.

 

Section 80EEA: Income tax benefits on home loan (first-time buyers) interest

An interest rebate may be claimed under Section 80 EEA which is higher than the sanctioned rebate claimed under Section 2 under Section0 Taka. On discounts of Rs 2 lakh and above. 1.5 lakh sanctioned under section 80C

 

This reduction of section 80EEA will be applicable only in the following cases: -

1. This deduction will be allowed only if the stamp duty value of the purchased property is less than Rs. 45 lakh

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2. Loans should be approved between 1 April 2019 and 31 March 2021.

The above 3 sections relating to tax benefits on home loans have been summarized as follows: -

Particulars	Quantum of Deduction (Rs.)
	Self Occupied Property	Non-Self Occupied Property
Section 24	2,00,000	No Limit
Section 80C	1,50,000	1,50,000
Section 80EE	1,50,000	1,50,000

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On October 06, 2021 by www.taxexcel.net

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Income Tax Deduction under Chapter VI-A Chapter V-A of the Income-tax Act contains different sub-sections of section 80 which permit an appraiser to guarantee a deduction from the absolute income because of different tax-saving speculations, supported uses, awards, and so forth Lessen taxes payable.

 

Chapter VI-A of the Income Tax Act has the accompanying sections:

 

Section 80C: Deduction in Life coverage Premium, Contribution to PF, Youngsters' Educational expense, PPF and so forth

 

This is the most well-known income tax deduction. Battling under this section is private and HUF is allowed. The greatest sum that can be guaranteed under 80C is Rs.1,50,000. Different speculation and instalment choices that fit the bill for deduction under this classification:

 

• Disaster protection premium instalment

 

Yearly arrangement of LIC or some other promoted backup plan (life advance, life misfortune and so forth)

 

Contribution of UTI Unit Connected Protection Plan (ULIP) or ULIP 10 (23D) of LIC Common Asset

 

PPF (Public Opportune Fund) contribution

 

Non-drove deferred yearly arrangement instalments

 

Government A conceded annuity is the sum deducted from the compensation of an administration representative to get him

 

SRF/RPF contributions

 

 Instalment of educational expenses

 

Lodging credit reimbursement

 

Management Asset contributions

 

Senior Resident Scheme Venture

 

PPF venture

 

long term FD venture

 

Sukanya Samriddhi Yojana venture

 

Shared Asset (Value Connected Reserve funds Scheme) Venture

 

Membership to any Public Lodging Bank (NHB) Store Scheme/Benefits Asset

 

Bond membership gave by Public Bank for Farming and Rustic Turn of events (NABARD)

 

Public Area Lodging Money Organization Advised Store Scheme Membership and Metropolitan, Town and Rustic Lodging Improvement Authority

 

Membership of value offers or debentures of a public organization or part of a certified issue of capital endorsed by the Leading group of Public Monetary Establishments where profits are made for a foundation organization.

 

Stamp duty registration, the enrollment expense with the end goal of the move of such house property to the endorsed person.

 

80CCC: Deduction in contribution to the proper benefits store. With Section 80C and Section 80CCD (1), the exception limit is Rs. 1.5 lakhs.

 

80CCD (1): Deduction in contribution to Focal Government Annuity Scheme - In the case of a representative, 10 % of pay (Fundamental + DA) and in some other cases, 20 % of his complete income will be without tax in one FY. The general limit with 80C and 80CCC is Rs 1.5 lakh.

 

80CCD (1B): Markdown up to Rs. 50,000 for contribution to Focal Government (NPS) Benefits Scheme.

 

80CCD (2): Deduction in the contribution of the business to the benefits scheme of the Focal Government. Tax benefits are given on 14% contribution by the business, where such contribution is made by the focal government and where the contribution is made by some other boss, 10% tax advantage is given.

 

80D: Deduction in case of health care coverage charge. Expenses up to Rs 25,000 are paid for those other than senior residents. For senior residents, the limit is Rs 50,000 and the general limit under 80D is Rs 1 lakh.

 

80DD: Decrease in co-support including treatment of a debilitated person The greatest exclusion limit under this section is Rs.75,000.

 

80DDB: A nervous system specialist, oncologist, urologist, haematologist, immunologist or another such expert can surrender a markdown of Rs 40,000 for the treatment of a recommended illness.

80E: Exception with no maximum limit in case of interest on advance taken for advanced education.

 

80EE: Deduction in case of interest up to Rs. 50,000 on credit taken for private house property.

 

80EEA: Rebate on interest up to Rs 1.5 lakh on credit taken for fixed home property (reasonable lodging).

 

80EEB: Markdown on interest up to Rs 1.5 lakh on credit taken for the acquisition of an electric vehicle.

 

80G: Gifts are made to explicit assets, good cause, and so on, contingent upon the nature, the limit shifts from 100 % of the all-out award, 50 % of the absolute award or 50 % of the award to 10 % All out income.

 

80GG: Lessening in lease paid by non-salaried persons who don't get HRA benefits. The deduction limit is Rs 5,000 every month or 25% of the all-out income each year, whichever is less.

 

80GGA: Complete rebate for explicit awards for logical examination or rustic turn of events.

 

80GGC: Complete exclusion for awards to ideological groups, if such awards are not in real money.

 

80TTA: Rebate up to Rs 10,000 in case of revenue on investment funds financial balance in case of assessors other than an occupant senior resident.

 

80TTB: Decrease in interest on stores up to Rs 50,000 on account of inhabitant senior residents.

 

80U: Rebate in case of a crippled person. Contingent upon the kind and degree of inability, the most extreme remittance endorsed under this section is Rs. 1.25 lakhs.

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On September 22, 2021 by www.taxexcel.net

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