Do you have home loans? Know your Section 24, Section 80C, 80EE; get this much tax benefits

Having a home loan is better because it comes with long tenures exceeding even 10 years. This allows you to make a proper plan for your repayment of debt in an appropriate manner. A borrower can always choose to close their loan before the tenure ends, however, this varies bank to bank. Some banks have a lock-in period, which means you cannot end your loan even if you have the lump sum amount to fulfill it.

Home loans are given depending upon your age, your salary status, your  capability of repayment and background checks of previous loans. If your credit score is very good then getting an home loan is very easy as your bank is assured that you are trustworthy and capable enough to repay your debt.

But did you know there are host of tax benefits given on home loan which can help you save big on your EMIs, your interest rates and many more. 

Archit Gupta, Founder & CEO ClearTax says, "Home loans are the most common and quickest route to become a home owner – unless you are one those rare breed of savers who save the entire money required to buy a house first and then invest. If you have availed a home loan, tax saving is the biggest silver lining you have every year as you pay your way towards complete loan repayment."

Here's a list of tax benefits given by Indian Income Tax Act, 1961 who invest in buying their own homes, as per ClearTax.

Home buyers, know your Section 24, Section 80C and 80EE

Our tax laws are filled with great rewards in the form of tax deductions for owning a house.

Given below are some sections that incentivize people to invest in their first home. With the impending tax season, when everybody is looking to save that extra amount, Section 80C, 80EE and 24 offer huge relief to home owners.

Joint home loan can maximize tax benefits. Here’s how!

You can enjoy all the aforementioned tax benefits twofold if you take a housing loan jointly with your spouse. Since the home loan amount is usually humongous, both can avail maximum deduction separately. However, the law applies only if you both own the property.

Wait, there are more under Section 24

a. Home Improvement Loan

It covers the renovation and construction costs. You cannot claim deduction on goods like electronic appliances or furniture. If you avail a personal loan towards home improvement, you can claim deduction up to Rs. 30,000.

Don’t forget to specify the purpose of the loan whether it is adding a room, re-tiling, repainting, renovation with permit and/or kitchen remodeling. However, only the expenses for construction can be claimed and not the cost of cabinets, tiles or any consumer durable.

b. Personal loan towards the property down payment

Sometimes people rely on personal loans to meet the down payment requirement. However, personal loans come with higher interest rates. Fortunately, interest part of the personal loan repayment amount can be deducted as per Section 24 - within the Rs. 2 lakhs deduction. This is because income from residential property is calculated after subtracting repair  expenses, interest for loan taken for acquiring the house and related expenses. And if you have availed a personal loan for the same, go ahead and claim your deduction.