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Tax Benefit on Home Loan: Section 24, 80EEA & 80C, With Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E for F.Y. 2019-20


A significant foundation to be remembered while taking a Home Loan is the Tax Benefit on Home Loan. To clarify the Tax Benefit on Home Loan, we would isolate the Repayment of Home Loan into 2 parts:-

1.         Repayment of the Principal Amount

2.         Repayment of the Interest on Home Loan

As the reimbursement includes 2 distinct segments, the tax reduction on home advance is administered by various segments of the Income Tax Act and these are guaranteed as assessment findings under various areas while recording the Income Tax Return.

The Sections under which Tax Benefit on Home Loan can be guaranteed are clarified beneath:-

Section 80C: Tax advantage on Home Loan (Principal Amount)

The sum paid as Repayment of Principal Amount of Home Loan by an Individual/HUF is permitted as expense reasoning under Section 80C of the Income Tax Act. The greatest assessment derivation permitted under Section 80C is Rs. 1,50,000.

This assessment conclusion is the aggregate of the finding permitted under Section 80C and incorporates sum put resources into PPF Account, Tax Saving Fixed Deposits, Equity Oriented Mutual assets, National Savings Certificate, Senior Citizens Saving Scheme and so on.

This duty conclusion under Section 80C is accessible on installment premise independent of the year for which the installment has been made. The Amount paid as Stamp Duty and Registration Fee is additionally permitted as expense conclusion under Section 80C regardless of whether the Assessee has not taken Loan.

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 In any case, a tax cut of home credit under this segment for reimbursement of the head some portion of the home advance is permitted simply after the development is finished and the fruition authentication has been granted. No conclusion would be permitted under this area for reimbursement of the head for those years during which the property was under development.


Particulars
Quantum of Deduction (Rs.)
Self Occupied Property
Non-Self Occupied Property
Section 24
2,00,000
No Limit
Section 80C
1,50,000
1,50,000
Section 80EEA
1,50,000
1,50,000

In addition, in the event that you are wanting to purchase an under-development property as it is evaluated at a lower cost when contrasted with a completely finished property, you are here additionally mentioned to take note of that GST is likewise required on under-development Property. Be that as it may, no GST is collected on properties on which development has been completely finished.

House Property ought not to be sold inside 5 years

Section 80C(5) additionally expresses that in the event that the assessee moves the house property on which he has guaranteed charge reasoning under Section 80C before the expiry of 5 years from the finish of the Financial Year in which the owner has been acquired by him, at that point, no finding and tax reduction on Home Loan will be permitted under Section 80C. The total measure of duty derivation previously asserted in regard of earlier years will be considered to be the Income of the Assessee of such year in which the property has been sold and the Assessee will be subject to make good on regulatory expense on such pay.

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Tax cut on Home Loan (Interest Amount)

Tax cut on Home Loan for the installment of Interest on Home Loan can be asserted as Deduction under Section 24 just as under the recently embedded area 80EEA (Inserted in the Budget 2019, to be material from first April 2019)

Section 24: Income Tax Benefit on Interest on Loan for Purchase/Construction of Real Estate

Tax cut on Home Loan for the installment of Interest is permitted as a conclusion under Section 24 of the Income Tax Act. According to Section 24, the Income from House Property will be decreased by the measure of Interest paid on Loan where the credit has been taken with the end goal of Purchase/Construction/Repair/Renewal/Reconstruction of Property.

The greatest assessment reasoning permitted under Section 24 of a self-involved property is liable to a most extreme breaking point of Rs. 2 Lakhs (expanded in Budget 2014 from 1.5 Lakhs to Rs. 2 Lakhs).

On the off chance that the property for which the Home Loan has been taken isn't self-involved, no most extreme breaking point has been recommended for this situation and the citizen can take charge finding of the entire intrigue sum under Section 24.

It would be ideal if you Note: on the off chance that a property has not been self-involved by the proprietor by reason of the reality inferable from his work, business or calling carried on at some other spot, he needs to dwell at that other spot not having a place with him, at that point the measure of assessment finding permitted under Section 24 will be Rs. 2 Lakhs as it were.

It is likewise essential to take note of that this duty conclusion of Interest on Loan under Section 24 is deductible on payable premise, for example on accumulation premise. Consequently, derivation under Section 24 can be guaranteed on yearly premise regardless of whether no installment has been made during the year when contrasted with Section 80C which considers finding just on installment premise.

Additionally, if the property isn't obtained/built finished inside 5 years from the finish of the monetary year in which the credit was taken, the intriguing advantage for this situation would be decreased from 2 Lakhs to Rs 30 thousand as it were. (Breaking point expanded from 3 years to 5 years from FY 2016-17 onwards).

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 Section 80EE: Income Tax Benefit on Interest on Home Loan (First Time Buyers)


Nirmala Sitharaman while reporting the Budget 2019 (II) presented another reasoning of Rs. 1.5 Lakhs under Section 80EEA for Interest paid on home advance. This

This finding is like conclusion which was before accessible under Section 80EE and is a piece of govt's plan to give a stimulus to the "Lodging for all" goal of the Govt and to empower the home purchaser to have minimal effort assets available to him.

This conclusion of Rs. 1.5 Lakhs would be pertinent from Financial Year 2019-20 onwards and would be far beyond the duty finding of Rs. 2,00,000 under Section 24 and Rs. 1,50,000 under Section 80C.

There are sure conditions for asserting this reasoning under the recently embedded Section 80EEA and just an individual who fulfills every one of these conditions would be qualified to guarantee the conclusion under this segment. These conditions are:-

1.         The loan has been endorsed by a budgetary organization during the period starting on the first April 2019 to 31st March 2020.

2.         The stamp obligation estimation of the house property does not surpass Rs. 45 Lakhs

3.         The assessee does not claim any house property on the date of authorization of the advance.

The over 3 Sections identifying with Tax Benefits on Home Loans have been condensed as under 


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