Home Loan Tax Benefit Calculators: Eligibility, Benefits And Conditions

Home loans are significant liabilities for borrowers. Recognising the immense financial strain that housing loan borrowers are under, the Indian Government offers attractive income tax benefits. Before availing of such a loan, you should consider the various sections under which tax deductions are available. A home loan tax benefit calculator can help in this regard.

Read on to know more about this particular calculator, as well as the tax-saving provisions for home loan borrowers. 

Understanding the Basics of Home Loan Tax Benefit Calculator

The Income Tax Act, of 1961 elaborates on how a borrower can avail of significant tax deductions when repaying a home loan. A home loan tax benefit calculator is an online tool that allows you to compute how much taxes you can save because of your housing loan. Keep in mind that you can claim tax deductions separately on principal repayment and interest payment within a financial year.

However, before learning how to operate such a home loan tax saving calculator, you must learn about the various provisions.

Different Tax Benefits for Home Loan Borrowers

Refer to the table below to learn about the sections for various home loan tax deductions.

Section	Component	Maximum Limit
80C	Principal repayment	Rs. 1.5 lakh
24b	Interest payment	Rs. 2 lakh
80EE	Interest payment	Rs. 50000
80EEA	Interest payment	Rs. 1.5 lakh

However, not every borrower can claim benefits under all of these provisions. You must meet certain conditions to qualify for tax deductions under each section. Before using the home loan tax benefit calculator, make sure you know about these terms.

Terms and Conditions to Claim Section 80C Tax Benefits

Section 80C allows deduction based on the principal repayment amount of a home loan. You can also claim this deduction on the registration and stamp duty of the house, but only for one year. Here are the conditions to claim tax benefits under this section:

• You cannot sell the concerned property within 5 years of possession.
• You can claim deductions on stamp duty only in the assessment year when you pay such charges.

Before using a home loan income tax benefit calculator, make sure you fulfil these conditions.

Terms and Conditions to Claim Section 24b Tax Benefits

Section 24b of the Income Tax Act allows up to Rs. 2 lakh tax deduction on home loan interest payments. However, to claim this benefit, you need to fulfil a few conditions as well. These are as follows: 

• You must avail of the home loan for the construction or purchase of a property only.
• If you are constructing a property with housing credit, its construction must be complete within 5 years. The period of 5 years is calculated from the end of the financial year during which you availed such a loan. This condition pertains to a self-occupied property only.
• If construction remains incomplete after 5 years, you can claim a maximum of Rs. 30000 under Section 24b.
• No time limit pertains to the construction when claiming Section 24b deduction if the property is not self-occupied.

Also Read- Tax Benefits On Second Home Loan

Eligibility and Conditions to Claim Section 80EE 

Section 80EE provides an additional provision to save taxes based on your home loan interest payments in a year. Those eligible can reduce their tax burden by up to Rs. 50000. Listed below are the conditions you must meet:

• Your home loan principal must not exceed Rs. 35 lakh.
• The property you intend to purchase should not be priced in excess of Rs. 50 lakh
• Section 80EE benefits are solely available to first-time homebuyers.
• To claim Section 80EE deductions, the date of home loan sanction should be between April 1, 2016 and March 31 2017.

If you do not meet any of the following conditions, you can still qualify for additional tax savings under Section 80EEA. Here are some terms to keep in mind: 

• The stamp value of your chosen home should not exceed Rs. 45 lakh.
• You must be a first-time homeowner.
• Your lender must sanction the home loan between April 1 2019, and March 31 2022.

While using home loan tax benefit calculators, remember that those eligible for Section 80EEA benefit cannot claim Section 80EE deduction.

Home Loan Tax Benefits for Joint Home Loans

Opting for a home loan jointly with your partner or family member can be highly beneficial. Both borrowers are eligible for the Rs. 2 lakh and Rs. 1.5 lakh deductions under Sections 24b and 80C, respectively. Therefore, the collective tax savings would be double when compared to sole ownership. To find out how much you can save, use a joint home loan tax benefit calculator.

Also read: 5 Benefits Of Taking A Joint Home Loan

Steps to Calculate Home Loan Tax Benefit

Now that you know more about home loan tax benefits, here’s how you can use a calculator to compute the tax savings: 

Step 1

On the home loan tax benefit calculator page, enter the year of tax assessment.

Step 2

Choose your category. Pick from male, female, senior and super senior citizens.

Step 3

Enter your annual income.

Step 4

In the appropriate field, enter the principal amount repaid during that fiscal.

Step 5

Next, enter the interest amount you paid in that same year.

Step 6

Click on calculate

A housing loan tax benefit calculator can compute your tax savings instantly in this method. Apart from tax savings, you must also use an EMI calculator offered by Navi. Navi offers up to Rs. 10 crores as housing credit to eligible applicants. To know more, download the Navi app. 

Final Word

With Section 80C and 24b of the ITA, you can maximise tax savings. A home loan repayment is a long-term commitment, and such reductions in liabilities can bolster a borrower’s finances. In this pursuit of saving on taxes, make sure to use a home loan tax benefit calculator. It ensures speedy and accurate calculations.    

Frequently Asked Questions 

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