For those who have been looking at a home for years, 2020 can be a good year to participate. Mortgage loan Rates are low, as are property prices. In addition, you get tax exemptions
TAX BENEFITS IN MAIN
Matched monthly installments (EMI) are generally divided into capital (the amount you take as a loan) and interest (the cost of the loan service). In case you do not opt for the new simplified personal income tax regime, the principal is allowed as a deduction of your total gross income (subject to a general limit under Section 80C with other eligible investments of 1.5 lakh)
TAX BENEFITS FOR INTEREST PAID
Live plus Interest payable on 'self-occupied' property is subject to a maximum deduction of 2 lakh under the heading 'income from home ownership'. This deduction is not available under the new simplified personal income tax regime.
This reduces your total tax obligation. But to claim this, it is essential that the acquisition or construction be completed within 5 years after the end of the financial year in which the loan was obtained; otherwise, the deduction will be limited to 30,000.
An additional tax deduction of up to 1.5 lakh has been introduced for interest on mortgage loans taken between April 1, 2019 and March 31, 2021, for buying a house with a stamp tax value of up to 45 lakh. However, you must not own any other residential property at the time the loan is sanctioned. If you haven't bought your first home yet, do it as soon as possible. This deduction is not available under the new simplified tax regime.
If you have rented a property, the difference between the rent you get after the adjustment of municipal taxes, the standard deduction and the total interest on the home loan is your loss of home ownership, which can compensate up to 2 lakh against your other income, say salary.
The loss under the ownership of the main house can be compensated with other income heads (including salary income) in the same year if you do not opt for the new simplified personal tax regime.