Availing a home loan comes with multiple benefits. Home loans let you achieve your goal of buying a new home and make you eligible for tax benefits. These tax benefits can contribute towards your EMI flow and savings. Take a look at the following points and calculate your tax benefits based on your loan amount.
In the case of self-occupied property acquired or constructed out of borrowed funds, the deduction available for interest on capital borrowed is Rs.2,00,000/-. In case of a rented property, the whole of the interest amount is allowed as deduction. The interest on borrowed fund in pre-construction period is allowed over a 5 year period commencing from the previous year in which the house is acquired or constructed.
The limit of repayment of housing loan qualifying for deduction u/s 80C is Rs.1,50,000/- (including Stamp Duty, Registration Fee incurred for the purpose of transfer of such residential house property).
Section 54 of the Income Tax Act provides relief to an individual or Hindu Undivided Family from capital gains arising from transfer of a residential house held by the assesse at least for a period of 36 months. Such capital gains to the extent utilised for purchase (within 1 year before or 2 years after the date of sale) or construction (within 3 years of date of sale) of a single residential house in India is exempt u/s 54. If the amount of capital gains is proposed to be utilised, but is not so utilised up to the due date for filing of return then, the amount of unutilized capital gain is required to be deposited in the "Capital Gains Account Scheme, 1988".
Section 54F of the Income Tax Act exempts long term capital gains arising from transfer of any long term capital asset other than a residential house. Such capital gains to the extent utilised for purchase (within 1 year before or 2 years after the date of sale) or construction (within 3 years of date of sale) of a residential house is exempt u/s 54F. To be entitled to this exemption the assesse should not own more than one residential house other than the house sold as on the date of transfer. The provisions of depositing the unutilized capital gain in the "Capital Gains Account Scheme, 1988" as explained above is also applicable.
Section 54EC of the Income Tax Act provides relief from capital gains arising from transfer of any capital asset on or after 1st April 2000 shall be exempt to the extent such capital gain is invested within a period of 6 months after the date of such transfer in the long term specified asset provided such specified asset is not transferred or converted into money within a period of 3 years from the date of its acquisition. However, the investment made on or after 1st April 2007 in the long term specified asset by assesse during any financial year cannot exceed Rs. 50 lakh. For claiming this exemption, the capital gains have to be invested (investment not to exceed Rs. 50 lakh during the FY in which the original asset is transferred or in the subsequent FY) within 6 months of the date of transfer in notified bonds issued by:a) National Highways Authority of India (NHAI)b) Rural Electrification Corporation Ltd. (REC)