If you are planning your tax for the financial years 2018-19, you should claim certain benefits that were introduced during Budget 2016. For home loan borrowers, these are some of the additional tax benefits, provided they qualify for the same. These benefits had been proposed back in 2016 and are still applicable. Besides, people who do not get HRA (House Rent Allowance) should also check this out. You may be able to claim the increased tax break, that you had received in Budget 2016. Here are some tax benefits on home loan that you must be knowing.
Additional deduction on home loans
If you had availed home loans for the first time in 2016-17, you must have been allowed to enjoy the additional tax benefit of INR 50,000, as per section 80EE of the Income Tax Act, 1961. Presently, a person who has borrowed a home loan and has been paying interest can get tax exemptions on the interest that is being paid. This margin is up to INR 2 lakhs, under Section 24. However, you can claim this deduction only if you are occupying the property yourself. As per the Budget 2016, the deduction of INR 50,000 comes after this limit of INR 2 lakhs. However, you must be aware of the conditions in order to enjoy these benefits.
You can claim the additional deduction on the interest that you pay for the loan only if the property is a residential one and self-occupied.
- This benefit is available only for the first-time home buyers.
- In an annual year, the maximum additional benefit has an upper limit of INR 50,000.
- The amount of loan cannot be more than INR 35 lakhs.
- The value of the property for which you take the loan should be within INR 50 lakhs.
- The loan needs to be sanctioned between 1st April 2016 and 31st Match, 2017.
This tax benefit is not available for people who had received the loans after March 2017. However, if you had got the loan sanctioned within the aforesaid period, you can get the benefits, until you repay the loan completely.
Time period increment to claim interest deduction
In a home loan, that interest that you need to pay gets deducted from the gross income, when the income from a self-occupied property is calculated. However, this is applicable only where the house is constructed or acquired within three years, calculated from the end of the respective financial year. In Budget 2016, a time period relaxation was introduced, and even of the construction or acquisition takes place in five years from the end of the respective year, one could get the tax benefits. This extension benefits taxpayers who are getting the house possessed in 2018-19.
Make sure to avail these tax reliefs, when you file your tax returns.
