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Awesome Tax Benefits on Your Home Loans.

By: lo@nzzone0 comments

Owning a house is a big dream for every common man.. While everyone can’t afford the  amount for constructing houses on their own home loans(popularly known as housing loans) can help them in turning their dreams into reality.

Housing loans can be availed for the construction of new homes, and also for extension of existing homes. Along with supporting your housing dream, housing loans can also help in saving your hard-earned money from taxes.

Here are some important tax benefits for home loan borrowers:

  1. Interest Benefit on Housing Loans:

The benefit is applicable for home loans taken for purchase/construction of a house, and the construction should be completed  within 5 years from the end of financial year (of which loan is taken)

According to Section 24(b) of  Income Tax Act

a) Interest incurred on capital borrowed for the purpose of acquisition or construction of house property shall be allowed as deduction up to Rs. 2 lakhs

b) In respect of let-out property, actual interest incurred on capital borrowed for the purpose of acquisition, construction, repairing, re-construction shall be allowed as deduction.

c)In respect of self-occupied residential house property, interest incurred on capital borrowed for the purpose of reconstruction, repairs or renewals of a house property shall be allowed as deduction up to Rs. 30,000.

  • Benefit on interest paid towards home loan (during pre-construction period):
    In case you are holding a pre-construction house and haven’t shifted yet to the house, the house is termed as pre-construction house, and the income-tax law also allows you to claim such interest, and it is known as pre-construction interest.

Subject to certain conditions,the entire amount of interest paid or payable on borrowed capital shall be allowed as deduction. Pre-construction interest shall be allowed as deduction in 5 annual equal installments

  • Benefit on Principal Repayment:

As per Section 80C of the Income Tax Act,the amount paid as Repayment of Principal Amount of Home Loan by an Individual/HUF is allowed as tax deduction under Section 80C of the Income Tax Act.

The maximum tax deduction allowed, however under Section 80C is Rs. 1,50,000.

  • Benefit on Stamp Duty & Registration charges:

Section 80C of the Income Tax Act ,also allows Stamp Duty & Registration Fee ,as tax deduction even if the Assessee has not taken Loan.

However the catch here is that the tax benefit under this section will be  allowed only after the construction is complete and the completion certificate has been awarded.

  • Benefit on Joint Home Loans:
    Section 80C of ITA also allows both principal and interest component deductions for home loans availed jointly.

Each borrower of the joint home loan can claim a standalone deduction of upto Rs.2 Lakh on Interest, and upto Rs. 1.5 Lakh on Principal Payment.

  • Additional Deductions:

i) Section 80EE:

In the recent budget of 2021-22 , it had been announced that
Tax benefits can be claimed from Section 80EE.


The section allows a deduction of up to Rs. 50,000 per financial year as per this section.This is applicable for  on the interest portion of the residential house property loan availed from any financial institution.

However  the amount of loan taken should be Rs 35 lakhs or less and the value of the property does not exceed Rs 50 lakhs.

ii) Section 80EEA:
The section is applicable only for home buyers for maximum up to Rs 1,50,000. The stamp duty also shouldn’t exceed Rs. 45 Lakhs.

However the section isn’t allowed to make a claim under Section 80E

Loanzzones.com is  the best loans service provider in India, offering Home Loan Services. We can help you in saving your time, and give you more choice in getting your desired loan. We give our best service, and pride ourselves on top excellent advice.

We Offer  flexible, affordable home loans with the lowest interest rate in the market. Looking for more details, please visit us at https://loanzzones.com , you can also reach us at +91-8886665883 for the best offers on Home Loans..

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