Mind Your Savings

Home
Financial Articles
Financial Articles Details

Update Date : 31-Dec-2022

Created Date : 31-Dec-2022

Category : Home Loan E-Book (Promotional_New)

Qualifying criteria for rightfully claiming tax benefits on home loans

Saving income tax is every working professional’s priority especially for salaried individuals as they have very limited means of protecting themselves from losing their hard earned money to tax.

However, many home buyers still lack clarity on the qualifying criteria for claiming a tax deduction on home loans.

As a result, they act upon advice coming from a lot of unreliable sources and do things that are either incorrect or irrelevant.

Hence, here in this post, we will help you find out how you can rightfully claim tax deductions on your home loan by staying relevant and tax-compliant and by keeping things as simple as possible.

To begin with, you must note that both, the interest as well as the principal component of your home loan qualify for tax deductions under different sections.

In other words, you can claim total tax benefits of upto ₹3,50,000/- p.a. for the repayment of principal as well as the payment of interest at the same time provided the following conditions are satisfied.

1) You are one of the co-owners of the house on which you have availed a loan.

2) You are earning and contributing to the home loan EMI.

3) The property that you are paying EMI for is ready to occupy.

4) If the said property is under construction, it should get fully constructed and ready to occupy within 5 years from the date of purchase.

5) If the property on which you’ve availed tax benefits is sold within 5 years from the date of purchase, all the tax breaks that you have claimed so far shall be reversed and added to your taxable income in the financial year in which such property is sold.