Income Tax Calculator: Up to Rs 5 lakh tax benefits that first time homebuyers just can't afford to lose out on

Income Tax Calculator: Buying a house means you have to pay home loan EMI on time. However, there are monetary benefits given by the Income Tax Department that the home loan applicant just cannot afford to miss claiming. As per the Income Tax Act, first time home buyers can claim income tax benefit of up to Rs 5 lakh under various sections. But, to claim these benefits, one has to be aware of these benefits too.

Speaking on the income tax benefits for the first time home buyers, Ravi Singhal, Vice-Chairman, GCL Securities Limited said, "Many first-time home buyers often remain confused about the Income Tax benefits that they can avail on home loan after the purchase of their first residential property. If you are buying home for the first time, you are entitled to get Income Tax benefits on home loan under three sections- Section 80C, Section 24 and Section 80EEA of Income Tax Act. These sections of Income Tax Act let you avail home loan benefit of Rs 5 lakh annually."

Income Tax benefit under Section 80C
Highlighting the income tax benefit under Section 80C of the Income Tax Act; Harsh Roongta, Head at Fee Only Investment Advisers said, "Under Section 80C of the Income Tax Act, a first time home buyer can claim tax benefit on up to Rs 1.5 lakh under Home Loan Principal and Stamp Duty component. However, to avail of this income tax benefit, the home buyer won't be able to sell out the property within five years of possession."

Tax exemption under Section 24
On income tax exemption for the first time home buyer under Section 24 of the income tax act, Harsh Roongta said, "Under Section 24, a first time home buyer can claim tax exemption on up to Rs 2 lakh income under home loan interest payment component. But, to avail of this tax exemption, the income tax assessee or any of the family members of his family should be residing in that house."

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Tax benefit claim under Section 80EEA
On income tax benefit available under Section 80EEA of the Income Tax Act for first time home buyers, Harsh Roongta said, "A first time home buyer can claim tax benefit of up to Rs 1.5 lakh under Section 80EEA provided the Stamp Duty value of residential property is up to Rs 45 Lakh. Apart from this, the home loan approval should be dated from 1st April 2019 to 31st March 2022."

Ravi Singhal of GCL Securities said that there are five conditions that the income tax assessee needs to fulfill while claiming the income tax benefit under Section 80EEA:

1] Stamp duty value of property should be up to Rs 45 Lakhs;
2] Loan sanction date should be between 1st April 2019 to 31st March 2022;
3] Assesse should not own any residential property till sanction of loan;
4] Should not be claiming any amount under income tax section 80EE; and
5] Loan should be borrowed from Financial Institution only.