Home Loan Tax Rebate: 4 income tax benefits that home loan borrowers shouldn't miss to claim during ‏ITR filing

Home Loan Benefit: To reduce income tax outgo, the Income Tax Act 1961 has some provisions that allow certain tax benefits. This applies especially to those paying back home loans. According to the tax and investment experts, an income tax payer can claim home loan tax rebate under Section 80C, Section 24b and Section 80EEA. They are of the opinion that there are 4 home loan tax benefits that a home loan borrower must not forget to claim during Income Tax Return (ITR) filing.

Section 80C

Speaking on the income tax benefit that a home loan borrower can claim under Section 80C of the Income Tax Act, Jitendra Solanki, a SEBI registered tax and investment expert said, "Under Section 80C, one can claim income tax exemption on up to Rs 1.5 lakh on home loan principal repayment in a particular year. This rebate is available on home construction as well but the property has to be completed within five years." 

Solanki said that while buying a home, one pays stamp duty for registration as well. The amount paid on stamp duty for property registration is also exempted from income tax outgo. However, these charges can be claimed within the overall limit of Rs 1.5 lakh.

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Section 24b

This section allows home loan borrowers to claim income tax exemption on home loan interest repayment. Elaborating upon the income tax exemption under Section 24b, Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "Ùnder Section 24b of the Income Tax Act, a home loan borrower can claim tax exemption up to Rs 2 lakh on home loan interest repayment. This limit includes both pre-construction and post-construction period."

Section 80EEA

The budget 2019 provided a big boost to the ‘Housing for All’ initiative by providing an additional tax deduction of Rs 1.5 lakh on home loan interest payment on home loans availed between 1st April 2019 and 31st March 2020. In order to qualify for tax deduction under section 80EEA, the value of housing property has been capped at Rs 45 lakh. Remember, this benefit can only be availed by the first time home buyers only.