Buying a house is everyone’s dream, and the Government is also encouraging citizens to invest in housing by providing several tax benefits under the Income Tax Act, 1961. Several schemes including Pradhan Mantri Jan Dhan Yojana are reflecting green signals on the housing sector in India by increasing the accessibility and affordability for Indian consumers. 

We have all dreamt of a house of our own where we can dwell in peace and tranquillity with our family and friends. And the dream can be fulfilled with the help of home loans in India with added tax benefits. However, it is essential to be aware of the benefits to save a significant chunk of your tax payments. There are two units in the repayment of home loan and, i.e. the principal amount and the interest on the loan amount. If you opt for a home loan, you are eligible for tax deductions on both these units under section 80C and 24(b) of Income Tax Act, 1961. 

Tax savings on interest paid

You can claim a tax deduction from the gross income on the interest paid on the home loan under Section 24(b). A relaxation up to Rs 2 lakhs can be availed for a self-occupied home, and the same is applicable if you give out your property on rent. 

Tax savings on the principal amount

You can claim a tax deduction on the repayment of the principal amount taken under Section 80C of the IT Act, 1961. This deduction is inclusive of the charges paid for registration and stamp duty. You can avail a relaxation up to Rs 1.5 lakhs under this section. Furthermore, it can be claimed together with other tax-saving instruments, including provident fund, fixed deposits, insurance premium, etc. from the taxable income. 

Additionally, if you’re a first time home buyer, you can avail more home loan tax benefits under Section 80EE wherein you can claim a deduction up to Rs 1.5 lakh on the payable interest annually. This deduction can be claimed only if the house value is up to Rs45 lakh and the loan is taken before the financial year 2021.  

How to get a home loan?

With the emergence of several NBFCs, you can easily get a home loan. If you’re a salaried employee or self-employed individual, over 18 years of age while applying and under 65 by the end of the tenure with an annual income higher than Rs 3 lakhs, you are eligible to secure loans for affordable housing without any hassle from Clix Capital. The NBFC provides loan amount that goes up Rs 1 crore and tenure that goes up to 25 years with simplified documentation.

All you have to do is submit a few necessary documents including completed application form, a passport-sized photograph, ID proof and address proof. Moreover, you can also apply for a home loan online. Once you do that, the customer representative will have a quick chat with you, and you’re on your way to get a home loan. 

Although home loans bring a financial cost of EMIs, there are also several other benefits. It helps to reduce your tax liability with tax benefits. Furthermore, it lends you a helping hand to fulfil your aspiration of buying your own home.