Purchasing a home on a loan is a lot more than pure happiness, you enjoy multiple tax benefits with it too! These benefits and exemptions not only help you save tax, but they also help in managing smooth cash flows.
HERE ARE THE DEDUCTIONS THAT INCOME TAX AUTHORITIES OFFER TO INDIVIDUALS WHO HAVE TAKEN A HOUSING LOAN FROM SPECIFIED FINANCIAL INSTITUTIONS:
The interest paid on capital borrowed for the acquisition, construction, repair, renewal or reconstruction of property is entitled to a deduction. Rs 2, 00,000 is the maximum amount eligible for deduction. In the case of self-occupied property and for rented out property, there is no limit on the amount of deduction.
You can get a maximum Rs.1, 50,000 deduction from the Income, on repayment of principal during a financial year. Stamp duty, registration fee or other such expenses paid for the purpose of transfer of such house property to the assesse is also considered under this amount. All these deductions should not exceed the overall limit of Rs. 1 lakh. However, deduction under Section 80C is not available in respect of payments made towards the cost of any addition, alteration, renovation or repair carried out after the issue of the completion certificate.
