Every
individual holds a dream in his life of owning his house without any other
person owning it with him. To accomplish this dream for those who can’t afford
to have their own house on their own go for various funding options. One of the
options people usually go for is a home loan for the monetary funding for their
houses. Home loans are the monetary funding granted by the bank/ financial
institution/ NBFC to an individual for funding his need to purchase a new home
against some terms and conditions. Now, many people are aware of the charges
and the different things about home loan and what all to do. Yet, some people
haven’t discovered the benefits they can avail when they go for a home loan.
So, here are a few of the tax benefits by the government that an individual can
avail while opting for a home loans inChennai.
Now,
the tax benefit on the home loan is to be claimed while the repayment process
of the home loan. The repayment process is bifurcated into two different things
while availing the tax benefit, i.e.
·
Repayment of the principal amount
·
Repayment of the interest amount
We
would be covering both the areas separately to have a clearer image of the tax
benefit on the home loan. The first aspect we are going to show the light upon
is the repayment of the principal amount.
REPAYMENT OF
THE PRINCIPAL AMOUNT :
The
law which supports the deduction of tax on the repayment of the principal
amount is the Section 80C of the Income Tax Act under which it is stated that
the amount paid by any individual or HUF (Hindu Undivided Family) on the
principal amount of the home loan out of it 1.5 lakh rupees should be deducted
for tax benefit.
The
deduction on the tax is available on the payment basis irrespective of the year
for which the payment has been made. Also not to forget, the tax that has to be
deduced out of the repayment of the principal amount is allowed only after the
completion of the construction of the home. No deduction of the amount will be
made if the construction hasn’t completed. The person who is paying the loan
can avail the benefit of the tax deduction of the interest paid at the time of
the construction in 5 equal installments. Also, if the person who has taken the
loan sells the property in 5 years then all the above deductions will be void.
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