It’s raining tax benefits on Home Loans this year. With the rates being slashed on loans and attractive schemes being offered by many banks and lending institutions, there are so many benefits of buying a home right now. Read on to learn about a few benefits of Home Loans that you might have missed.
Paid a processing fee? Did you claim tax deductions on that?
There’s a list of those expenses that you thought were miscellaneous but yet are connected to your Home Loan, right? The processing fee, for starters. Well, that fee you paid on your loan is eligible for a tax deduction under Section 24 along with the interest paid on your Home Loan.
Missed EMIs? You can still claim tax benefits on the interest paid
Even if you’ve missed paying an EMI on your Home Loan, you will still be eligible to claim tax deductions on the interest for the entire year.
Thinking of selling your house within five years of buying it? No tax benefits, sorry
In case you’re thinking of selling your house within five years of buying it or from the date of taking the loan, say goodbye to your tax benefits. The benefits will be reversed and you will need to pay extra tax on your annual taxable income.
Additional Reading: Do you have the perfect CIBIL Score for a Home Loan?
Who funded your house purchase? Did you take a loan from a relative?
If you’ve taken a loan from a friend or relative to construct or purchase property and are wondering if you can claim tax benefits, don’t worry, you can. As far as taxes go, the source of the loan is not important. What counts is what you used the money for. Can you convince the tax authorities that the money you got from your favourite uncle was used to buy your house? Then, you’re sorted.
Are you the co-owner of the property AND the borrower of the loan? If not, don’t expect those tax benefits
If you own a property and are paying the EMIs for the loan that is in your name, then you can claim tax benefits on the Home Loan. Remember, you need to be both the owner and borrower of the loan to enjoy the tax benefits.
Claim tax benefits for the interest paid in the pre-construction period up to five years
It is widely known that you can start claiming tax benefits on your Home Loan only after the construction is completed and you take possession of the property.
Wait. Did you know that you can also claim tax deductions on the instalments that you paid while the property was being constructed? Well, you can. You are allowed to claim deductions on the interest paid over a period of five years from the year of possession.
Now, you’re not in the dark about tax benefits of Home Loans anymore.
Are you set to house hunt, already? First thing on your agenda should be to check out our amazing offers on Home Loans.
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