Usually loans are liability on one’s head and anyone would like to settle it as soon as possible. But, if you have availed a home loan, which is long term liability for you not less than 15-20 years. Then, at your interest repayments, you can avail tax benefits. These tax benefits are applicable under some circumstances, which are as follows:
• Tax deductions can be claimed on the interest payments of housing finance, which are subject to an upper limit of Rs. 1, 50,000 for a fiscal year.
• The interest paid on home loans taken for the various purposes like repairs, renewals or reconstruction, also qualifies for the deductions under the limit of Rs. 1, 50,000.
• If both of the spouses are tax-payers with their independent income sources, they both can get tax deduction benefits on the same housing loan to the proportion of the amount of loan taken in their own name.
• Tax benefits under the section 24 and section 80C of the income tax act can be claimed only when individual has paid the equated monthly installments (EMIs) regularly.
• According to the Income Tax Act, only the person who has borrowed the loan is eligible to claim for the tax rebates.
• Taking a loan from a family member or a friend will not qualify for such deductions. Only loans taken and interest paid thereon, to specified financial institutions which offer housing loans, qualify for deduction.
• One can claim for the tax deduction on an additional loan that is taken for the purpose of extension or addition to the same house. These deductions are offered only on the existing loan that is less than Rs. 1, 50,000.
• Tax benefits on interest of home loans are offered only for the original loan and for a second loan taken to repay the first loan and not on other subsequent loans. This means that if you have already availed of one loan to refinance the original loan and want to another to refinance or settle the second loan, tax rebate on interest payments cannot be availed by you.
• Tax deductions can be claimed on the interest payments of housing finance, which are subject to an upper limit of Rs. 1, 50,000 for a fiscal year.
• The interest paid on home loans taken for the various purposes like repairs, renewals or reconstruction, also qualifies for the deductions under the limit of Rs. 1, 50,000.
• If both of the spouses are tax-payers with their independent income sources, they both can get tax deduction benefits on the same housing loan to the proportion of the amount of loan taken in their own name.
• Tax benefits under the section 24 and section 80C of the income tax act can be claimed only when individual has paid the equated monthly installments (EMIs) regularly.
• According to the Income Tax Act, only the person who has borrowed the loan is eligible to claim for the tax rebates.
• Taking a loan from a family member or a friend will not qualify for such deductions. Only loans taken and interest paid thereon, to specified financial institutions which offer housing loans, qualify for deduction.
• One can claim for the tax deduction on an additional loan that is taken for the purpose of extension or addition to the same house. These deductions are offered only on the existing loan that is less than Rs. 1, 50,000.
• Tax benefits on interest of home loans are offered only for the original loan and for a second loan taken to repay the first loan and not on other subsequent loans. This means that if you have already availed of one loan to refinance the original loan and want to another to refinance or settle the second loan, tax rebate on interest payments cannot be availed by you.
