Budget: Watch out for the tax provisions relating to home loans

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Softer interest rates for home loans have led to an uptick in residential property registrations across India. The icing on the cake is that repayment of principal and the interest amount provide various tax breaks, which help reduce a taxpayer’s total Income-tax (I-T) outgo.
For instance, under section 80C of the I-T Act, the principal is allowed as a deduction from the taxpayer’s gross total income (subject to an overall cap of Rs. 1.5 lakh with other eligible investments). Under section 24, the interest payable on ‘self-occupied’ property is subject to a maximum deduction of Rs. 2 lakh.
However, it should be noted that deduction of interest on housing loan from a self-occupied house property is not available if the taxpayer opts for the new ‘simplified’ personal income tax regime. Ditto, in such cases, the benefits under section 80-C are not available.
Tax experts and…

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