Know How You Can Save Tax On Home Loan Premiums in 2022?

A new home is always a dream come true for many individuals. The government of India has always encouraged its citizens to invest in real estate property. This is the reason why housing loans qualify for the Section 80C tax deduction.

When you purchase a property with a housing loan, you get a lot of tax benefits, which help you save money on your taxes. Every year, around 1.5 lac can be deducted from the principal repayment that you make towards your home loan. Who is eligible for a tax deduction against an easy home loan? Individuals who purchase a new property for resale or rent it out can claim a housing loan tax exemption under sections 80C and 80 EEA.

Interest on a home loan is tax-deductible

When you take a housing loan, the rate of interest you pay is deductible under taxation. If the loan is used for the construction of any residential property, it should be finished within five years' time at the end of the financial year. The interest payment and the principal repayment are two parts of the monthly instalment that you pay for your housing loan. Section 24 under taxation allows you to deduct the interest part of your EMI paid for the year from your total income up to a maximum of Rs 2 lakh. The maximum deduction for the interest that you pay on the self-owned property is 2 lakh in the financial year.

The principal loan amount is tax-deductible

When you take a housing loan, you can also enjoy tax benefits on the principal repayment that you pay for the housing loan. Under section 80C, it allows you to deduct the principal loan portion that you pay for the monthly EMI amount for the entire year. The maximum claimable amount is less than 1.5 lacs. However, the house property should not be sold within five years of possession if you want to claim this tax deduction. If you sell the property, the earlier deduction will be deducted from your income in the year of sale.

Wrapping up

Get an easy home loan by visiting the official website of Clix Capital. Apply for a home loan only after understanding the essentials of tax deduction. The best advantage of getting a housing loan is tax benefits.