Owning a home is an important thing in life. It is a dream long cherished by many. These days, there is a huge increase in property prices in India. And so buying a house in one payment is difficult for many people. Therefore, many people opt for a home loan and it makes the home buying process easier.
Many nationalized and private banks offer housing loans. There are also some home finance companies in India that offer home loans. One of the most attractive benefits of taking out a home loan is that it helps you save taxes while investing in a property. Taking out a home loan makes you eligible for tax refunds under Section 80(c) and Section 24(b) of the income tax regulations.
Section 24(b) refers to “Interest Paid” on the Mortgage Loan and Section 80(c) refers to “Repayment of Principal” on the Mortgage Loan. These tax deductions can be used at 1 lakh for the repaid principal and 1.5 lakhs for the repaid interest in that particular tax year, for which you are filing your returns.
Benefits of the joint loan:
Another advantage of these tax rebates is that if you are taking a joint home loan with your parent, child, or spouse, these tax rebates can be taken advantage of simultaneously by everyone involved in the joint loan. joint loan. For example, if the ownership ratio is 3:2, then the loan amount of 50 lakhs will be divided into 30 lakhs and 20 lakhs respectively. The interest and principal applicable to the respective amounts will be taken into account for each person who takes the loan.
Therefore, taking a joint home loan has the benefit of increasing your eligibility for the loan and maximizing your tax refund. When you apply for a joint mortgage loan, all co-owners of the property must also be co-applicants, but the reverse is not required.
If you are buying a home under construction, you can claim tax benefits only after construction of the home is complete. In addition, if you are going to rent it out for rent, you must also pay taxes on the rental income received. Purchasing a home loan is a definite benefit to your tax planning. But if you can buy your home with your own funds, then you shouldn’t get a home loan just to claim your tax benefits. It is always better to invest in an asset with your own funds. You can pool the money you would end up paying as EMI into a fixed deposit to get a good return.
