In recent years, the financial sector of India has witnessed significant growth. Banks and other financial institutions have started providing various loan products with attractive features. One such popular credit product among home buyers is the home loan. As a result of home loans, millions of people across the country have successfully realized their dream of purchasing their own house. High loan amounts, competitive home loan interest rate, borrower-friendly terms and conditions, and additional advantages like tax benefits make home loans ideal for today’s financially aware India.
Let us have a look at some of the tax benefits associated with a home loan
- Under Section 80C of the Income Tax Act, borrowers can avail a deduction up to Rs. 1.5 Lakh on principal repayment
- Under Section 24 of the Income Tax Act, borrowers can avail a deduction up to Rs. 2 Lakh on interest amount payable.
Home Loan Balance Transfer
Due to a lot of financing options available, a large number of borrowers are opting for a home loan balance transfer. The Home Loan Balance Transfer Process allows the borrowers to transfer the outstanding loan amount from the existing lender to a new one.
This enables the borrowers to repay their home loan on comparatively interest rates. Borrowers can also apply for a home loan balance transfer to avail a top-up loan above of the primary credit.
Home loan Tax Benefits on Home Loan Balance Transfer
- Under Section 24b of the Income Tax Act, borrowers can avail tax benefits on home loan transfer, if they have availed a top-up loan. Borrowers are eligible for a maximum exemption of Rs. 30,000 on the interest paid for the top-up loan per financial year.
- Moreover, they can claim tax deductions on the interest of the primary loan amount, which makes home loan an ideal investment for all borrowers.
Now, the interest on housing loan can be claimed in 2 different scenarios.
- One Self-Occupied and One Let-Out Property
Tax rebates of up to Rs. 2 Lakh can be claimed only on a self-occupied property. There will be no upper limit applied for the let-out house.
- Both Let-Out Property
The entire interest on housing loan can be claimed for deduction from the taxable income in case both are let-out properties.
The clauses to avail tax benefits on home loan interest rates are mentioned below:
- The deductible limit is valid only if the mortgaged property is a self-occupied house.
- The applicant will have to submit all the relevant documents proving that the top-up loan was used for acquisition, construction, renovation, or repair of a house.
- Borrowers can enjoy tax benefits only for the duration of the loan tenure. The additional time required for home loan balance transfer will be calculated under this facility.
- Additional deductions of up to Rs. 50,000 will be applicable for properties bought at less than Rs. 50 lakh. These deductions will be effective if the loan amount availed is less than Rs. 35 Lakh and only in case of first-time borrowers who will reside in the property.
There are various financial institutions in the market that offer different loans at attractive terms. A Bajaj Finserv Home Loan available on Finserv MARKETS comes with various features such as quick approval, instant disbursal, and zero hidden charges. Bajaj Finserv home loan balance transfer can help you lower the interest rate of your existing home loan, thereby reducing the cost of borrowing in the long run. So why wait, opt for Bajaj Finserv Balance Transfer and lower the loan repayment burden of your home loan today.
Also read about the perfect CIBIL score required for home loan. You can also check your eligibility of home loan with the help of home loan eligibility calculator and home loan emi with the help of home loan emi calculator.
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