For most of us, buying a home completely with our funds isn’t possible due to the nation’s rising real estate prices. A house loan thus becomes a better option. It not only makes homeownership desires possible, but it also provides significant tax benefits.
Buying a house is one of the most important financial decisions you will ever make. This investment has several financial advantages, including tax advantages. Homebuyers can maximize their savings and minimize their tax obligations in 2024 by taking advantage of several tax benefits. This is your full guide to maximizing your housing tax benefits in 2024.
People who apply for a home loan may be eligible for tax incentives under Section 80 EEA and Section 24B, which offer income breaks of up to Rs. 1.5 lakh. We are going to discuss the many tax advantages associated with home loans in this post.
Various Income Tax Act Sections for Home Loan Tax Rebates
Home Loan Tax Rebate Sections | Maximum Deduction (Per Annum) | Conditions |
Section 24b | Up to Rs 2 lakh | For self-occupied properties, the top limit is Rs 2 lakh; there is no upper limit for rented or presumed-to-be-rented buildings. |
Section 80C | Up to Rs 1.5 lakh | Applicable to the repayment of the principal. |
Section 80EEA | Up to Rs 1.5 lakh | Extra deduction for first-time homeowners who satisfy certain requirements. |
Benefits of Income Taxes on Home Loans
A home loan is eligible for deductions under three separate sections of the IT Act. Principal and interest are the two components of a house loan. According to income tax regulations, you may be able to deduct the repayment of both of these parts. Let’s look into these parts of the housing tax advantages in more detail:
1. Section 80C Housing Loan Tax Advantages
You can deduct taxes on the principal sum you repay to your lender under Section 80C of the IT Act. This discount also applies to your home’s stamp duty and registration costs. In a fiscal year, the maximum amount of home loan tax exemption allowed under Section 80C is Rs. 1.5 lakhs. Be aware that section 80C also applies to several other investment choices, including tax-saving FDs, PPF, and ELSS funds. If you have made investments in these kinds of products, the Rs. 1.5 lakhs deduction cap will not change.
- Benefits of Home Loan Tax under 24(b)
Income tax rebates on home loans are provided by Section 24(b), but it is limited to the interest portion of the loan. It also applies if you have taken out a loan to build or renovate a home. You can deduct the amount from the prepayment and processing fees you make to your lender.
You are eligible to deduct the entire interest payment if you have rented out the property you acquired. Nonetheless, the maximum deduction amount in a fiscal year is Rs. 2 lakh if you have occupied the property.
- Advantages of Home Loan Tax under 80EE
Only new home buyers are eligible for these home loan tax savings. If you meet certain requirements, you may be eligible for extra deductions under Section 80EE of up to Rs. 50,000 if this is your first time buying a home.
The maximum house loan sum to qualify for this benefit is Rs. 35 lakhs, and the maximum cost of the property to qualify for it is Rs. 50 lakhs.
Deduction for a Joint Housing Loan
Here are the Co-owner’s benefit when it is about Joint Home Loans because they can deduct more money. Depending on their respective shares in the loan and the property, each co-owner may claim these exemptions on their own.
Tax Benefit Sections | Component | Maximum Deduction | Conditions |
Section 24(b) | Interest | Up to Rs 2 lakh | This loan is only available for the purchase or construction of new houses. It must be finished within five years of the end of the financial year in which it was taken out.
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Section 80EEA | Interest | Up to Rs 1.5 lakh | Applicable to properties up to Rs 45 lakh in stamp value. |
Section 80EE | Interest | Up to Rs 50,000 | Applicable for loans up to Rs 35 lakh and properties up to Rs 50 lakh in value.
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Section 80C | Principal | Up to Rs 1.5 lakh | Applicable if the property is not sold before the five years of possession is over. |
Section 80C | Stamp Duty | Up to Rs 1.5 lakh | Must be claimed during the same fiscal year that the funds were expended.
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Borrowers of joint home loans are eligible for these deductions as long as they fulfill the previously indicated special requirements. It is crucial to investigate these possibilities in order to maximize tax benefits and to speak with professionals for precise advice.
Find the Best Home Loan Provider
Because there are so many methods to reduce your taxes with a house loan, first-time borrowers may find it difficult to maximize their deductions. It is crucial to select a lender cautiously as a consequence. Select a reputable lender who can provide thorough advice on home loan tax exemption regulations.
This will not only help you realize your dream of owning a home, but it will also result in significant tax payment savings.
Best Home Loan Providers in 2024
Bank/Finance Company | R.O.I (Reducing Per Annum) | Processing Fees | Loan Amount | Cibil Score |
HDFC Bank Home Loans | 8.45% – 10% | 0.5% – 1% | 5.00 Lacs – No Limit | 650 |
Kotak Bank Home Loan | 8.75% – 10% | N/A | 20.00 Lacs – No Limit | 700 |
Bank of India Home Loan | 8.5% – 10.75% | 0.25% – Rs.10000 | 10.00 Lacs – No Limit | 675 |
Canara Bank Home Loan | 9.25% – 13.8% | N/A | 10.00 Lacs – No Limit | 675 |
Aavas Housing Home Loan | 9.9% – 18% | 1% – 1.5% | 25.00 Lacs – 5.00 cr | 650 |
Bajaj Housing Finance Home Loan | 8.45% – 10% | 0.2% – 0.5% | 5.00 Lacs – 75.00 cr | 650 |
PNB Housing Home Loan | 8.75% – 14% | 0.25% – Rs.10000 | 5.00 Lacs – 20.00 cr | 625 |
Shri Ram Housing Finance Home Loan | 11.5% – 13% | 1% – 1.25% | 10.00 Lacs – 1.00 cr | 650 |
We Rize Home Loan | 10% – 18% | 0.5% – 1% | 5.00 Lacs – 75.00 Lacs | 650 |
Mahindra Finance Home Loan | 9% – 15% | 1% – 3% | 3.00 Lacs – 75.00 Lacs | 650 |
Capri Global Bank Home Loan | 9.5% – 15% | 1.25% – 1.5% | 10.00 Lacs – 1.50 cr | 650 |
Tata Capital Home Loan | 8.6% – 11% | 0.2% – 0.5% | 30.00 Lacs – 7.00 cr | 750 |
Aditya Birla Home Loan | 8.9% – 11% | 0.5% – 1% | 25.00 Lacs – 25.00 cr | 675 |
Piramal Finance Home Loan | 10.5% – 14% | 1% – 1.5% | 30.00 Lacs – 5.00 cr | 650 |
Satin Housing Home Loan | 11% – 18% | 2.5% – 3% | 5.00 Lacs – 1.00 cr | 700 |
Indiabulls Finance Home Loan | 9.4% – 10% | 0.5% – 1% | 20.00 Lacs – 5.00 cr | 675 |
Federal Bank Home Loan | 8.5% – 10% | 0.5% – Rs.13000 | 50.00 Lacs – 20.00 cr | 675 |
IDFC Bank Home Loan | 8.85% – 9.25% | 1% – 1.5% | 10.00 Lacs – 5.00 cr | 680 |
ICICI Bank Home Loan | 8.6% – 10% | 0.25% – 0.5% | 50.00 Lacs – No Limit | 700 |
Axis Bank (Asha Home Loan) | 9.9% – 14% | 0.5% – 1% | 5.00 Lacs – 1.00 cr | 700 |
Yes Bank Home Loan | 9.4% – 10.5% | 0.25% – 1% | 50.00 Lacs – 10.00 cr | 700 |
Yes Bank Home Loan (Small Segment) | 9.9% – 11% | 1% – 1.25% | 5.00 Lacs – 1.00 cr | 680 |
Standard Chartered Home Loan | 8.5% – 10% | 0.5% – 1% | 25.00 Lacs – 25.00 cr | 700 |
Jana Small Finance Bank Home Loan | 10.5% – 13.5% | 1% – 1.5% | 5.00 Lacs – 3.00 cr | 650 |
DCB Bank Home Loan | 9.75% – 14% | 0.5% – 1% | 30.00 Lacs – 3.00 cr | 650 |
SBI Bank Home Loan | 8.5% – 10.4% | N/A | 10.00 Lacs – No Limit | 650 |
Bank of Maharashtra Home Loan | 8.5% – 9.65% | N/A | 10.00 Lacs – No Limit | 675 |
Indian Bank Home Loans | 8.5% – 10.4% | N/A | 10.00 Lacs – No Limit | 675 |
Union Bank of India Home Loan | 8.5% – 10.8% | N/A | 10.00 Lacs – No Limit | 675 |
Central Bank of India Home Loan | 8.5% – 10.4% | N/A | 10.00 Lacs – No Limit | 700 |
Bajaj Finserv Home Loan | 8.5% – 10% | 0.2% – 0.5% | 20.00 Lacs – 15.00 cr | 700 |
L&T Finance Services Bank Home Loan | 8.5% – 9.5% | 0.25% – Rs.10000 | 30.00 Lacs – 3.00 cr | 650 |
Vistaar Finance Home Loan | 13% – 21% | 2% – 2.5% | 5.00 Lacs – 50.00 Lacs | 650 |
IIFL Bank Home Loan | 8.9% – 14% | 1% – 1.25% | 5.00 Lacs – 50.00 Lacs | 650 |
Aadhar Housing Finance Home Loan | 10.5% – 14.75% | 1% – 1.5% | 5.00 Lacs – 70.00 Lacs | 600 |
Axis Finance Home Loan | 9.5% – 11% | 0.5% – 1% | 30.00 Lacs – 10.00 cr | 650 |
Fullerton (Grahshakti Home Loan) | 10.5% – 16.5% | 1% – 1.5% | 10.00 Lacs – 75.00 Lacs | 650 |
Hero Housing Home Loan | 10% – 11% | 0.5% – 1% | 20.00 Lacs – 5.00 cr | 650 |
India Shelter Home Loan | 13% – 20% | 1% – 2% | 5.00 Lacs – 50.00 Lacs | 500 |
Shubham Housing Finance Home Loan | 10.5% – 14.75% | 1.5% – 2% | 5.00 Lacs – 50.00 Lacs | 450 |
DMI Housing Home Loan | 11.5% – 14% | 1% – 1.5% | 5.00 Lacs – 75.00 Lacs | 650 |
Vastu Housing Finance Home Loan | 10% – 15% | 1% – 2% | 5.00 Lacs – 3.00 cr | 650 |
Can Anyone Claim both an HRA and a Home Loan?
Yes, there are tax breaks available to people who pay interest on a house loan in addition to receiving a House Rent Allowance (HRA) from their companies. Certain restrictions do, however, exist, such as the inability to buy another piece of property in the same city as the HRA.
Does Taking Out a Second Home Loan Offer Any Tax Benefits?
Yes, people who take out a second house loan can also benefit from tax advantages. Similar to the initial house loan, deductions are allowed for principal repayments under Section 80C and interest payable under Section 24, subject to specific criteria.
Know Everything about Mortgage Interest Deductions
The deduction of mortgage interest from taxable income is one of the biggest tax advantages of becoming a homeowner. If you itemize your deductibles on your tax return, you, as a house owner, can deduct the interest you pay on your housing loan up to a specific amount. In the initial phases of your mortgage, when interest involves the biggest portion of your payments, this deduction can save you a lot of money on taxes.
Purchasing a home is a wise financial decision, not just a fantasy. The goal of this in-depth guide is to arm self-employed and salaried homebuyers with the information they need to successfully negotiate the complex world of home loan tax benefits.
Make the most of your tax advantages and build the house of your dreams.