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A payee can get tax benefits through home loan under two different Sections of Income Tax Act.
- Under Section 24- Deduction on interest on home loan for self-occupied property up to Rs 2 lakh.
- Under Section 80C- Deduction on repayment of principal amount on home loan up to Rs 1.5 lakh.
- U/s 80EE :- Deduction on interest on home loan up to Rs. 1 lakh ,the deduction can be availed who are get the HBL Int after 01/04/2013 on or after.
Tax benefits under Section 24 and Section 80C and U/s 80EE: Mr.
X is eligible to claim tax benefits under Section 80C for the principal
repayment of the home loan and under Section 24 for interest
components. He can claim deduction up toRs 1.5 lakh along with all other permissible instruments like, life insurance premium, PPF, ELSS, NSC etc under Section 80 C and up to Rs 2 lakh under Section 24.
Another Rs. 1 Lakh U/s 80EE as HBL Interest w.e.f. 01/04/2013.
Tax Benefits on Joint Home Loan: One can avail tax benefit on home loan up to Rs 1.5 lakh under
Section 80C and 2 lakh under Section 24. But if you go for a joint home
loan along with your spouse in the ratio of 50: 50, then both of you
can claim these benefits separately. So the combined limit will beRs 3 lakh under Section 80C and 4 lakh under Section 24. This can reduce your overall cost of loan for the family considerably.
Total deduction will be Rs 7 lakh and if both spouses are in the highest tax slab, they will get a tax benefit of Rs 210000/- which is just double compared to an individual home loan, although this provision may vary from person to person.
Before
going for a joint home loan, you should mutually work out your
ownership share if you wish to optimize the tax benefit. That is, if you
and your spouse own the house jointly in the ratio of 50:50, both can
claim deductions in equal proportion. Therefore, if your tax slabs are
different, you need to work out your ownership share in a manner that
the spouse in the higher tax bracket owns a bigger share.
Please
note that it is essential to be co-owners to be eligible for tax
benefits. The co-ownership share also plays a role in determining your
deductions.
