How to Save More Income Tax through Home Loan and Saving Tips

How to Save More Income Tax through Home Loan: Any individual can buy house on a loan with multiple tax benefits. It’s every one’s dream to construct a house and these home loans are very helpful for such persons to construct their house. Apart from the other house loans, a joint home loan can give the tax payer much income tax relaxation benefit for a longer time. Home loan is a very good financial tool to save income tax after the regular tax savings slabs.

It is one of the biggest debt in any individuals lifetime. A home loan can save a huge amount of the money from income tax if the earning is below to higher slab of income tax. If an individual buy a house jointly with the spouse and take a joint home loan and spouse is working and has a separate source of income, both of them can claim separate deductions in income tax returns.

The Home loan entitles Individuals to Deduction under Section 80C of up to Rs. 1.50 Lakh and Interest Deduction under section 24 of up to Rs. 2 Lakh. There are many benefits of section 24 and 80C on Jointly Owned Property, Under Construction Property, multiple properties and simultaneous benefit of Interest exemption and HRA. The person will be eligible to claim both the interest and principal components of the repayment during the year.

Tips to Save More Income Tax through Home Loan:

The interest can be claimed as a deduction under Section 24. You can claim up to Rs. 200,000 (Rs. 150000/- up to A.Y. 2014-15) or the actual interest repaid whichever is lower and you can claim this interest only when you are in possession of the house.

The Principal can be claimed up to the maximum of Rs. 150,000 (Rs. 100000/- up to A.Y. 2014-15) under Section 80C. This is subject to the maximum level of Rs 150,000 (Rs. 100000/- up to A.Y. 2014-15) across all 80C investments. For this you need to show the statement provided by the lender showing the repayment for the year and also the interest and the principal components of the same.

After the 2013 budget, under section 80EE an individual can save extra Rs 1 lakh for interest paid on home loan beyond the regular 1.5 lakh limit and there are some conditions the tax payer needs to satisfy for that. The conditions are given below:

The people who buy house from April 1, 2013 and March 31, 2014 can only avail this benefit. 
The home loan amount should be less than 25 lakh only.
The value of the property cannot be more than 40 lakh.

If you cannot avail the entire deduction in this year then the remaining balance can be availed in the next financial year.

The home loan helps an individual to save extra money from the income tax. So one can plan accordingly and take home loan, they can save a huge money from the income tax. There are many useful home loan income tax saving tips which can be followed by everyone to save income tax.

For more information about Home loan insurance

Home Loan Insurance Benefits in India
How to Pay Home Loan Part Payment Online
Tax Benefit on Home Loan-Housing Loan Tax Benefit Section 24, 80EE and 80C
Best Income Tax Saving Options for 2016 Other Than 80C
List of Documents Required for Home Loan in India
How to Save More Income Tax through Home Loan and Saving Tips How to Save More Income Tax through Home Loan and Saving Tips Reviewed by amara sangati for Rating: 5