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Money Matters

Tax Benefits on Your Home Loan 2020 | Top Five Benefits of Income Tax on Home Loan | YES BANK

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Buying a house is everyone’s dream. Besides being a place that you can call home, a house also is a great investment. It offers great returns in the long-run and multiple tax benefits under the Income Tax Act, 1961. These exemptions significantly reduce your tax liability. Further, even many government schemes and bank initiatives promote the accessibility and affordability of a house in India. Today, getting a home loan is easy, highly reasonable and offers significant tax advantages.

Here are the top five home loan tax benefits of income tax on home loan:

  1. Interest paid on home loans: If you take a home loan for the purchase or construction of your house, the interest paid on the loan amount, up to ₹2 lakhs, is eligible for tax deduction under Section 24B. However, the construction of the self-occupied house must be over within five years from the year of loan sanction. For a let-out asset, there is no upper limit of interest exclusion. This home loan tax benefit is offered only in the year of completion of the house.

  2. Interest on home loans during pre-construction: Section 24B permits you to claim income tax benefit on home loan taken in the pre-construction period. So, if you buy an under-constructed house or have not yet moved in the property, you are still eligible for tax exemption on home loan interest. That said, the deduction is granted in five equal instalments beginning from the year of acquisition or completion.

  3. Principal repayment: According to Section 80C, you can claim home loan tax benefits up to ₹1.5 lakhs for principal repayment. However, to be eligible for this benefit, you must not sell the property within five years from that of possession. Additionally, stamp duty and registration charges are also excluded. But the overall limit remains ₹1.5 lakhs.

  4. Additional deductions: Under Section 80EE, you can get income tax benefits on home loans up to ₹50,000, if your loan amount is ₹35 lakhs or lesser and you do not own another house. Moreover, the value of the property should not be more than ₹50 lakhs. This advantage is available for home loans taken between 1 April 2016 and 31st March 2017. Further, the Budget 2019 also provided added relief for home buyers under Section 80EEA up to ₹1.5 lakhs. However, to avail of this benefit, the stamp amount of the property should be lower than ₹45 lakhs, the debt must be taken between 1 April 2019 and 31 March 2020, and you must not own another house.

  5. Joint home loans: In case, you take a home loan jointly with another person, who is also a co-owner of the property, each person can enjoy the tax exemptions for interest paid and principal reimbursement. The exemptions are similar to that of individual home loans.

Attractive Home Loans from YES BANK

YES BANK values your desires and provides you with wide-ranging solutions to easily finance your home. With low-interest charges and processing fees, trust YES BANK to lay strong foundations of your future.

Features and benefits of home loans by YES BANK:

  • A variety of home loans, like purchase, self-construction, improvement, etc. at attractive interest rates.

  • Customised loan programs for self-employed individuals.

  • The easy portability of loan to YES BANK at lower interest and therefore, less EMIs. To-up facility available upon loan transfer

  • Accessibility of loan for longer durations up to 35 years, ensuring smaller EMIs.

  • Efficient loan processing.

  • Full or partial prepayment fees for floating rate home loans.

  • Tax benefits as applicable on home loan interest, principal, stamp duty, etc.

At YES BANK, you can avail home loans online or at any YES BANK branches in India as per your convenience.

You can also visit YES BANK's website to know more about their Savings Account and Fixed Deposit

 

 

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