HOME LOAN TAX BENEFITS - Things to know - Jain Housing

HOME LOAN TAX BENEFITS – Things to know

HOME LOAN TAX BENEFITS – Things to know

HOME LOAN TAX BENEFITS

Buying a home is the most special thing for any human, as it is a means of a security deposit for the future. Who would not want to buy a home? The major task is, to unscramble. It is important to get to know the status of the real estate market for investing right. Also, the backbone of investing in a new home is ‘finance’. There are various limitations and liabilities in the real estate market. While searching for the best bank for a home loan people miss the basic home loan tax benefits that they aren’t aware of. Also, nowadays, learning about the home loan tax benefits isn’t a tough task as they are clearly available on the net. Home loans are the boon for those who want to buy their dream home but aren’t able to afford it.

A Home loan is generally indebted to buy a legally approved residential property. The interest rates are low for women applicants.

The maximum period of repayment is 30 years, however, you can choose the tenure time based on your convenience.

BENEFITS OF HOME LOAN:

  • You are eligible to claim a tax deduction up to Rs. 1.5 Lakhs based on Section 80 C and up to Rs. 2 Lakhs under Section 24B of the Income Tax of India 1971 Act in a financial year. This is valid only for a fully constructed home and not for homes that are under construction.

  • For the second home you buy, you could claim a tax deduction for the entire amount of what you have paid as the housing loan interest as per Section 24B. Home loans do not have pre-payment penalties, unlike other loans. You could even use this money to settle in your other loans.

  • The maximum period of repayment is 30 years, however, you can choose the tenure time based on your convenience.

  • It has the longest repayment tenure period compared to all the other types of loans.

  • Unlike paying for high rent in metro cities, buying a home will save you from all those stress.

  • Home loans start at 8.65% and go up to 9.5%. Learn the tax perforations properly and invest in the best.

ELIGIBILITY CRITERIA FOR HOME LOANS:

  • The minimum age of the candidate should be 18 years and the maximum age should be 70 years.

  • The Monthly income of the applicant should be greater than Rs.20,000.

  • The applicant should have 3 years experience if salaried and minimum of 5 years experience if self-employed.

  • The bank will offer up to 90% of the complete home cost as the loan.

  • 2-6 employed earning people in the family will add to the eligibility factor.

  • A credit score of more than 750 is beneficial to apply for loans.

  • A referral could fetch perks for you for the loan.

  • An existing asset will aid loan processing.

DOCUMENTS REQUIRED TO COMPLETE THE HOME LOAN PROCESS FOR INDIAN CITIZENS:

  • KYC compliance certificate

  • 6 months pass book entry copy

  • Salary slip copy for the past 6 months

  • Individuals whose salary is greater than Rs.20,000 should mandatorily fill Form 16

  • All the necessary identification proofs

  • Permanent address proof

  • Communication address proof

  • Statement of the availed loan

  • Passport size photo of the applicant

  • Appointment letter of the employee in which organization he/she is working in

  • Proof of savings or investments

  • Copy of the buyer agreement

SECTION 80 EE

  • This section is specially formed for the first time home buyers and in this, there is an availability of claiming a deduction of up to Rs.50,000 for loans for Rs. 35Lakh or less for a home worth Rs.50 lakh.

  • The loan should be sanctioned by a verified financial institution.

  • After the deduction, the balance will be deducted as per the tax slab rates.

  • These deductions are not applicable for HUF, AOP, and companies. It is subjected only to individuals.

HOME LOAN FOR NRI’s:

  • The maximum deductions available is up to Rs. 1,50,000 as per Section 80 C.

  • As per Section 24, the tax deduction is available for repayment of interest on home loans up to 2,00,000.

DOCUMENTS REQUIRED FOR AN NRI:

  • Proof of identity, residence, and income

  • Photocopy of a valid passport and visa

  • Copy of the property allotment letter/buyer agreement or agreement to sell, if the property is already shortlisted

  • Passport size photographs of all applicants

  • Cheque towards processing fees

  • Power of Attorney if applicable

ON A BRIEF NOTE:

A home loan is not like an ordinary loan as it is more advantageous. The major benefit is its tenure period for the payback. Loans are easily available and many new schemes have been stated in a conclusion that the ‘Home for All’ should be initiated. Alas, it is our home that has to be as per our expectations because home is where our heart is.

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