Tax Savings On Home Loan Can Be Doubled By Apply With Co Applicant Other Benefits

Home Loan Tax Savings: Many people think that buying a house by taking a loan is not right, that’s why they invest elsewhere. However, many financial planners recommend buying a home by taking a home loan and paying EMIs instead of recurring investments or SIPs. However, if you are paying income tax, then buying a house, especially buying a house on loan, can prove to be a profitable deal. Let’s talk about what are the benefits of taking a home loan under the Income Tax Act and how you can double the tax savings?

First of all, let us know whether to buy a house or to live on rent… What is the justification for this debate. Buying a home, especially the first home, is more of an emotional decision than an investment. Everyone buys the first house for their own living, because own house gives peace of mind in many ways, which is not possible in a rented house. If we look at it from the point of view of income tax, then buying your house is also beneficial. In the case of rental, only HRA can be claimed, while there is an opportunity to claim many exemptions when buying a house by taking a loan.

Can claim these deductions

Under the Income Tax Act, a deduction of up to Rs 1.5 lakh can be taken under section 80C on the repayment of home loan principal amount. Whereas, under section 24(b), a deduction of up to Rs 2 lakh can be claimed on home loan interest. The borrower can claim up to Rs 3.5 lakh in tax savings in a financial year by combining these two.

Double benefit on taking joint loan

If you take a joint home loan with your wife, both of you can claim these benefits separately. In this case, the combined limit will be Rs.3 lakh under section 80C and Rs.4 lakh under section 24(b). That means a total deduction of Rs 7 lakh will be available. This is a move that can turn your home loan with asset creation tool into a tax saving avenue.

It is important to take care of these things

However, to take advantage of the tax benefit, some things should be taken care of. The co-borrower of the home loan should also be a co-owner of the property being purchased. If this does not happen, he cannot avail tax benefits. In such cases, despite being a partner in paying the EMI, he will not be able to get the tax benefit.