Income Tax Deduction:
Income Tax Deduction can be claimed on both the Payment of Principal u/s 80C and Interest amount due on Home Loan u/s 24.
Who can get the benefit of Home Loan?
To get the income tax benefit on home loan one must be the Owner or co owner of the house AND should also be the borrower or co borrower of the Loan. Only Individual and member of HUF can get benefit under section 80C and 24. Partnership firm, company etc cannot claim this benefit.
Tax benefit on Principal Repayment :
Tax Deduction upto Rs 1.5 lakh u/s 80C can be claimed on actual repayment of the principal amount of loan. This Deduction is not available on accrual basis.
Tax benefit on Interest Due :
Tax Deduction upto Rs 2 lakh can be claimed for the outstanding amount of interest for the period u/s 24 of the income tax. Interest deduction shall include both pre construction and post construction eligible deductions.
First time Home Buyers :
Additional Deduction of Rs 50,000 is available for first time home buyers under section 80 EE. This deduction is available in respect of loans sanctioned between 2016-17.
Other Eligible Deduction:
Apart from claiming income tax deduction on loan repayment whether principal or interest amount deduction in respect of the following expenses can also be claimed:
Stamp duty and registration charges
Processing fee and service charges
