Owning a house is like a dream to everyone, but having said that, looking at property prices in major cities makes us have a second thought of owning a house. Though there are some relief to the home buyers. Home Loans at cheap interest rates from Banks and NBFCs is one such solution for high property prices in metro cities. You can take a Home Loan to buy a property and pay EMI for it on monthly basis. Moreover, there are tax benefits too on paying Home Loan on EMI basis. LoanKuber presents an article on tax benefits on paying a Home Loan on EMI. Meanwhile,you can easily calculate your Tax Benefits on Home Loan EMI by using any online EMI calculator.
Income tax Benefits – You can claim interest as a tax deduction under Section 24 .It can be claimed up to Rs. 2 Lakhs or the actual interest repaid (whichever is lower). Principal can be claimed up to maximum of Rs 1.5 Lakhs under Section 80C. To claim these deductions you need to show your repayment schedule provided by lender mentioning interest and principle component. You can calculate EMI on online EMI calculator on websites like LoanKuber.com.
Tax deduction for spouse – If you and your spouse have jointly taken Home Loan and both are working, then both of you can claim separate deductions on your income tax returns. Both of you can individually claim deduction of Rs. 1.5 Lakhs under Section 80C.
Tax Deduction in ratio of EMI Repayment – If Husband pays 75% of EMI and 25% is paid by wife, then the husband can claim tax deduction on interest in same ratio under section 24. You can easily calculate this with help of an online EMI calculator.
Tax benefits on loan from friends and relatives – You can claim tax deduction on loan you received from your friends and relatives too. But to claim this deduction, you need to have a valid certificate from them mentioning terms and conditions of loan given.
Tax exemption for Co–applicant – You can claim tax benefit as co-applicant of Home Loan as long as you are either an owner or a co-owner of the property. If you are paying all of the EMI from your account, then you can claim maximum tax benefit on principal and interest.
Tax Deduction of two Home Loan EMI – You can get tax benefit under Section 80C on both Home Loan EMIs, subject to a condition that the total deduction should be less than or equal to Rs 2 Lakhs.
No Tax deduction on additional cost – There is no Tax Deduction on any additional cost like commission cost that is paid to agent under Income Tax rule.
LoanKuber has prepared following table on Different Tax Benefits under Section 80C and Section 24 for Home Loan.
To claim above mentioned tax benefit on EMI of your Home Loan, you need to furnish documents provided by lenders/bank. After claiming your tax deductions, rest of your income would be taxed under normal tax rules.
You can easily calculate your tax deduction on your Home Loan EMI with easy to use EMI calculator available online. We at LoanKuber can assist you in fulfilling your dream of getting a Home Loan at affordable rates.