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 for 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 Benefits 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) |