Tax Benefits On Buying Home – Purchasing a property with a home loan does have substantial tax advantages in the type of deduction toward paid home loan interest and home loan principal repayments.
Beyond those, you can still save tax from FY 2019-20 i.e. from the AY 2020-21 by introducing an extra deduction of 1,50,000/-. This deduction is presented as of this evaluation year (I-T Returns to be submitted this year).
Mostly during the lifespan of a home mortgage, this can be declared given that the complete deduction under such a requirement doesn’t really surpass an amount of 1,50,000/-. Not that all homeowners receive this deduction and only those from reasonably priced low-cost homes.
Hire a income tax constant and make this process easier.
It is an extra deduction, in relation to the house property income deduction still in place. This deduction does not need to be asserted from the house property earnings and from the total gross income on its own.
Tax Benefits On Buying Home – U/s 80 EEA
- This extra deduction is accessible for the repayment of interest on a home mortgage loaned from the banking institution.
- The deduction of interest on household income is accessible for loans bought from friends and family, but that isn’t the case with regard to this deduction. Throughout this case, the loan must be loaned from a bank.
- Closely related deductions are also accessible for $500,000/- u/s 80EE of the Income Tax Act, but that’s only obtainable if you already have bought a home loan in the 2016-17 FY. Whether you have taken advantage of the 80EE deduction or are entitle for the deduction, you were also excluded from claiming a deduction of 1,50,000/- u/s 80EEA
Eligibility Conditions Of U/s 80 EEA
- This deduction is really only accessible to people, and not to HUFs or companies
- The price of the house you have purchased must not outstrip Rs. 45,00,000/-
- The home should be funded through a house loan
- Such a mortgage should be loaned in the 2019-20 or 2020-21 financial year (date of the purchase agreement is not relevant)
- You should not own any residential real estate as of the date of sanction of this home loan
- This deduction may be asserted in the 2020-21 evaluation year and in successive evaluation years
- The sum toward which this deduction is assumed can not be asserted as a deduction towards any other section for e.g. a home mortgage if you have overall interest repayment of 200,000/-, and you have asserted the same as an income deduction from house property u / s 24 of the Income-Tax Act, then again you can not assert the same sum as the deduction u / s 80EEA. That being said, if you have interest repayment of some 2,50,000/- and asserted some 2,00,000/- as deduction u / s 24 of the Income-Tax Act, then the residual balance of some 0,50,000/- may be asserted as deduction u / s 80EEA.
Revenue from residential property and deduction u/s 80EEA
- This deduction is to be subtracted from total gross revenue and never from household income
- The interest deduction u / s 24 is to be subtracted from household property income
- If the number of the overall interest repaid is not processed in claiming deduction u / s 24 of the Act, the unused portion u / s 80EEA may be claimed
- If the person owns a residence in joint ownership and both co-owners borrow the home loan, then both co-owners can assert exemption individually up to a limit of 1,50,000/-