Taking a home loan can help you save tax as per the provisions of the Income Tax Act, 1961. Even more so after the announcements made during the latest financial budget 2020: Tax benefits on home loans remain unchanged, though the timeline for availing loans for affordable housing has been extended for a year – till 31 March 2021. While a housing loan can help you get a house for yourself, it can also turn out to be an expensive affair. But the various tax benefits that come with such a loan help you save money every year. Take a look at how you can make the most of these benefits.
Tax Benefit on Home Loan (FY 2020-2021)
The following table gives you the tax benefits under the corresponding sections of the Income Tax Act, 1961.
|Income Tax Act||Maximum Deductible Amount|
|Section 24||Rs.2 lakh (for self-occupied house)|
No limit (for let-out property)
|Section 80C||Rs.1.5 lakh from Principal (including stamp duty and registration fee)|
|Section 80EE||Rs.50,000 Additional interest (for first-time buyers)|