Today, property prices have increased a lot, and due to this, it is very difficult to buy a house. However, a house is still needed to live in. Now people take home loans in such a situation. But do you know about the tax exemption available after a home loan? If not, then you should know. Under the Income Tax Act 1961, many sections provide the benefit of tax exemption on home loans. Due to this, the expenses incurred on buying a house can be reduced considerably.
Exemption is available on the principal amount.
Under Income Tax Section 80C, a rebate of up to Rs 1.50 lakh is available on paying the principal amount. Apart from this, tax benefits can also be claimed on expenses such as stamp duty, registration charges and other expenses incurred at the time of buying the property under this section. Under Section 80C, you can claim up to a limit of Rs 1.5 lakh. However, the claim has to be made in the same year in which the expenditure is incurred.
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Exemption is available on payment of interest.
The interest paid on a home loan is divided into two types. The first interest is paid before the construction of the house, and the econd interest is paid after the construction of the house. For the interest paid after the construction of the house, tax exemption of up to Rs 2 lakh is available under section 24b of the Income Tax Act. Tax exemption can be claimed in the same year in which the construction of the house is completed.
An additional exemption is available for buying a house
If you are going to buy a house, then an additional tax exemption of up to Rs 1.5 lakh can be availed under section 80EEA of the Income Tax Act. This exemption is different from the exemption of Rs 2 lakh available under section 24. That is, you can claim a total exemption of Rs 3.50 lakh.