Home loans can help you save tax

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Home loans can help you save tax

  • Interest payable on ‘self-occupied’ property is subject to a maximum deduction of 2 lakh. This reduces your total tax liability.
  • To claim this, acquisition or construction should be completed within 5 years from the end of the financial year in which the loan was taken

  • Interest payable on 'self-occupied' property is subject to a maximum deduction of 2 lakh under the head 'Income from House Property'. This reduces your total tax liability. But to claim this, acquisition or construction should be completed within 5 years from the end of the financial year in which the loan was taken. If not, the deduction will be limited to 30,000.

    Additional deduction of 50,000 is allowed for first-time home buyers if certain conditions are fulfilled If you have rented out your property, the difference between the rent you get after adjustment of municipal taxes, standard deduction and interest on housing loan is your 'loss'. For example, if the annual rent is 5 lakh, after considering standard deduction @30% of gross value (which is generally rent), 3.5 lakh is your loss. As per Finance Act 2017 amendment, you can set off only 2 lakh of such loss against your other income, say salary. The balance (surplus loss of 1.5 lakh), can be carried forward over eight years. However, it can only be set off against your rental income.
Location: India

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