According to section 80C, one can avail tax deductions of the Income Tax for the Principal amount repaid during the financial year. The maximum deduction allowed is 150000 INR. There are certain conditions to be fulfilled to claim h0ome loan deductions under 80C.
The deduction can be claimed only after the completion of construction of the property. The amount paid during the financial year can be claimed entirely during the particular year to the extent of 1, 50,000 INR. The deduction is allowed for the repayment of the borrowed loan for the construction of the home property.
The loan borrowed by any financial institution according to the Income Tax Act of 1961 and the interest paid from the individuals is allowed as deduction under section 24. The deduction is allowed only when the principal amount is paid completely. After the claim of the deductions, the property is not be sold for 5 years from the date of possession.
There are certain limits posed by the Income Tax Department as to how much amount can be claimed. For a loan, the sum must be borrowed for the purchase or construction of a new house or property. From the FY 2017, the purchase or construction of the property must be completed within 5 year span. For these limits, the deductions are allowed up to 2, 00,000 INR.
For a loan, the sum borrowed for repair, renovation, or reconstruction is allowed for deductions up to 3, 00,000 INR. To claim the income tax benefits on home loans, calculate the number of tax deductions and submit your home loan interest certificate and EMI statement to your employer at the time of income tax proof submission with your form 12BB. Apart from these tax saving benefits, stamp duty and registration taxes, processing fee and service charges also give deductions.