Whether you are planning to take ownership of the house or want to sell the house already owned, it is always considered the best practice to consult a tax practitioner to understand the consequences and implications from the taxation point of view. While a capital gain tax is applicable when a house is sold, there are certain benefits of the tax deduction for owning a house bought satta matka through a loan. Let us discuss in detail what tax benefits are available to an individual.
Tax Benefits You Get Upon Receiving a Home Loan
- The interest portion of the loan is tax-deductible, and the maximum deduction available in one financial year is Rs. 2 lakhs.
- Pre-construction interest is deductible in five equal instalments after the construction is completed. However, the maximum deduction under the income head house property that can be claimed is limited to Rs. 2 lakhs, as mentioned above.
- Principal repayment of Rs. 1.5 lakhs is also available under Section 80C of the Income Tax Act, 1961 (The Act). The condition to claim this benefit is that the property should not be sold within five years of possession.
- Stamp duty and registration charges can also be claimed under Section 80C within the limit of Rs. 1.5 lakhs, as mentioned above.
- Section 80EE of the Act allows claiming deduction of an additional amount of Rs. 50,000 subject to the fulfilment of the conditions mentioned below:
- The amount of the loan must not exceed Rs. 35 lakhs.
- The value of the property must be less than Rs. 50 lakhs.
- The loan must have been sanctioned between the dates 1st April 2016 to 31st March 2017.
- The applicant should not own any other house property as of the date of the loan’s sanction.
- Section 80EEA allows an additional deduction of Rs. 1.5 lakhs subject to the conditions mentioned below:
- The individual should not be eligible to claim deduction under Section 80EE.
- The stamp value of the property does not exceed Rs. 45 lakhs.
- The sanction of the loan must happen between the dates 1st April 2019 to 31st March 2020.
- The applicant should not own any other house property as of the date of the loan’s sanction.
- When a joint loan is taken, the interest benefit and principal repayment benefit is available individually to both the co-owners. This means that the interest benefit of Rs. 2 lakhs and the principal repayment benefit of Rs. 1.5 lakhs can be claimed by both the joint owners separately.
To claim this, the house should also be co-owned by the two applicants claiming separate deductions.
The Home Loan Calculator will help you understand the eligibility of how much amount of a home loan you will be able to get.
The EMI Calculator will help you understand how much EMI you will need to pay per month for a particular amount of loan acquired.