Here are the benefits of Home loan that you need to know

Having a home of our own is a dream every individual see day and night. Nowadays home loan act as a helping hand that enables you to have a home of your home. But paying back the home loan often feels like a bag of rocks sitting on your head. Yet, home loans are not always a source of worry. Like every client has two faces, home loan too, show similar traits. If they cause some problems, then they also offer you some benefits as well. Yes! Taking a home loan gives you some tax  benefits.

Following are some tax benefits that you should know before taking a home loan:

1. REPAY THE PRINCIPAL AMOUNT AND GET A CANDY (tax benefit) FREE!!

Under section 80c of the Income Tax Act, you can claim the tax benefit for the amount of EMI being paid for the repayment of the principal amount of the home loan. But here comes a warning signal! You can claim only when the home loan is taken for properties that are fully constructed. Thus, if you have taken a loan for properties under construction then I am really sorry, you are out of the group of people who can enjoy this. Hence, you need to present the completion certificate of your property before claiming the benefit. Another thing to note is that you can claim a maximum benefit of Rs. 1.5 lakhs on principal repayment.

Also know:  TIMELY PAYMENT OF PROPERTY TAX = YIELDING BENEFITS

2. INTEREST ALSO HAS SOMETHING TO OFFER!

Under section 24 of the Income Tax Act, a tax benefit of a maximum of Rs. 2 lakhs can be claimed for the payment of interest on the home loan, after the completion of construction.

Interest paid prior to completion of construction cannot be deducted directly, but section 24 gives you some relief by providing you with the option to aggregate the pre-construction interest and claim as an extra deduction in five equal installments for five succession financial years, beginning from the year when the construction was started ( with upper limit of Rs. 2 lakhs).

BUT! If the construction of the property is not completed within three years of issuing loan then you are no more eligible to claim the tax benefit on payments of interest.

In case the property is not self-occupied by the owner and is given our for rent, it is possible for the tax-payer to deduct the entire interest payment for a particular year, without an interest payment (yippee!) .

3. REGISTRATION CHARGES AND STAMP DUTY HAVE SOME HIDDEN CANDIES TOO!

Section 80c of the Income Tax Act provides a tax deduction for registration charges and stamp duty . However, you can enjoy this benefit only in the year when these extra charges were paid.  For more go to Indian Realty Exchange.