Home loan is always an option for middle class individual as well as for wealthy people too. Wealthy people are finding it as a best a tax saving option on their income through this housing loan too. Let us see some facts those are associated with the home loan for the effective tax deduction needs:
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• Tax deduction is not applicable while purchased vacant land or house plot on loan. Tax deduction is applicable only on properties constructed or acquired by the individual.
• Ownership is another important integral aspect in the tax exemption procedure. People very often commit mistakes in this aspect. This exemption is applicable only, when the property or part of the property is in the individual and this will not be applicable, when the property is in the name of mother or father or brother or spouse.
• People often buy a property through home loan on joint registration thinking that they can claim complete tax exemption. Here, tax exemption will be applicable in the same ratio as the property registered on joint venture between two individuals or among few individuals.
• Mode of home loan repayment is another crucial aspect that will govern a lot this tax exemption. The housing loan EMI should be paid specifically from the borrower’s bank account without fail and not from any other family member’s account in order to avail the exemption.
• If the property is let out to someone and earning some income in the form of rent, then this income will be considered duly by the tax man while offering the tax exemption on the home loan.
• There will be tax reversal, when a property owner availed home loan and tax exemption and sold the same property within 5 years for higher rate. So, make it sure to sell this property after 5 years of the purchase in order to avoid this tax reversal according to the Sex 80c.
• Home loan extension is applicable for tax exemption, but conditions apply. Top up loans from your bank can be availed on self-occupied property and claim your tax deduction successfully. Here, this tax exemption is limited up to 30000 per year on the loan repayment and interest rate.
• The Sec 24 of tax act say that an individual can avail deduction on tax on interest repayment of the additional loans considered from the home purchase or construction from relatives and friends too.
Definitely, tax benefits deserve special attention from all while planned to avail home loan. Understand well the facts involved in tax deductions with home loans and try making more out it wisely.
• Tax deduction is not applicable while purchased vacant land or house plot on loan. Tax deduction is applicable only on properties constructed or acquired by the individual.
• Ownership is another important integral aspect in the tax exemption procedure. People very often commit mistakes in this aspect. This exemption is applicable only, when the property or part of the property is in the individual and this will not be applicable, when the property is in the name of mother or father or brother or spouse.
• People often buy a property through home loan on joint registration thinking that they can claim complete tax exemption. Here, tax exemption will be applicable in the same ratio as the property registered on joint venture between two individuals or among few individuals.
• Mode of home loan repayment is another crucial aspect that will govern a lot this tax exemption. The housing loan EMI should be paid specifically from the borrower’s bank account without fail and not from any other family member’s account in order to avail the exemption.
• If the property is let out to someone and earning some income in the form of rent, then this income will be considered duly by the tax man while offering the tax exemption on the home loan.
• There will be tax reversal, when a property owner availed home loan and tax exemption and sold the same property within 5 years for higher rate. So, make it sure to sell this property after 5 years of the purchase in order to avoid this tax reversal according to the Sex 80c.
• Home loan extension is applicable for tax exemption, but conditions apply. Top up loans from your bank can be availed on self-occupied property and claim your tax deduction successfully. Here, this tax exemption is limited up to 30000 per year on the loan repayment and interest rate.
• The Sec 24 of tax act say that an individual can avail deduction on tax on interest repayment of the additional loans considered from the home purchase or construction from relatives and friends too.
Definitely, tax benefits deserve special attention from all while planned to avail home loan. Understand well the facts involved in tax deductions with home loans and try making more out it wisely.
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