Having a own house is a “Dream” to many Indians. While the older generation works hard their lifetime and fulfill their dream during their retirement, the younger generation are fulfilling their dreams in their late 20’s-30’s.
This is possible due to higher earning capacity of the youngsters in their initial career. As youngsters earning 4 digit, 5 digit salary figures in their initial jobs, naturally banks are offering attractive home loan offers to them.
As the generation has changed and the youngsters have that capacity to repay loans there is no wrong in opting for housing loan. Indeed it is a “Wise Decision” as housing loan is eligible for income tax deduction up to 5 lakhs. Surprised on hearing this? To Know how read the rest story-
Principal Deduction under Section 80(c)– As per current income tax rules, an individual can claim deduction up to 1.5 Lakh under section 80(c). As section 80(c) is intended for tax saving instruments one can claim principle deduction of 1.5 Lakh under this section.
Interest Deduction Under Section 24(b)– An individual can claim up to 2 Lakh rupees deduction under section 24(B) of the income tax act. Do note that this section is intended only for the “Interest” portion of the housing loan
Additional Deduction of 1.5 Lakh* under Section 80EEA– There is an additional clause that additional deduction of 1.5 Lakh can be claimed but subject to certain restrictions. This section is applicable to some only if an individual fulfills-
- He must be a First Time Home Buyer.
- The loan applicant should not own any residential house property as on the date of sanction of the loan.
- Housing loan should not be taken from a non-recognised institution or from friends and relatives. It must be taken from a recognised financial institution or a housing finance company
- Stamp duty value of the house property should be Rs 45 lakhs or less.
- Carpet area must be lower than 90 square meter(968 square feet)in non-metro cities
- While in Metro Cities like Delhi, Chennai, Hyderabad and Bengaluru maximum carpet area allowed is 60 square meter(645 square feet)
If you are eligible to the above terms and conditions overall 5 Lakh(1.5 Lakh under Section 80(c),2 Lakh under section 24(b), 1.5 Lakh under section 80EEA) total 5 Lakh rupees can be claimed under section 80(c),24(b),80EEA respectively. If you are eligible grab the opportunity at the earliest.