5 THINGS YOU NEED TO KNOW ABOUT THE LAKH TAX BENEFIT ON HOME LOAN
is the effective savings? An individual buying a first house can now claim a total deduction of up to R2.5 lakh on interest paid under section 24 and 80EE of the IT Act. Additionally, principal repayment can be claimed under Section 80C of the IT Act. This will result in a total saving of R30,900.
happens if my total interest is less than R1 lakh? If interest for the financial year 2013-14 is less than R1 lakh, the balance can be carried forward and claimed as a deduction in the financial year 2014-15.
the new residential house as co-owners? If a property is purchased by two people as co-owners, and they satisfy all the conditions mentioned above, each co-owner will be entitled to the additional tax savings under section 80EE.
happens if the wife wants to purchase a new residential house? If the spouse has an inde- pendent source of income, then an additional tax break of R1 lakh can be availed, provided the above conditions are satisfied. In case both husband and wife are working and earning separate incomes and if there is a house which is already in the name of husband, then the wife can purchase a house in her name and avail this additional tax benefit. However, the house should be in the name of the wife and also funded by her, otherwise clubbing provisions may apply.
point of caution There is no clarity on whether the additional tax benefit is available for property under construction or not.
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