Home Loan Deductions Available Under Income Tax Act for AY 2024-25
When it comes to purchasing a home, many individuals opt for a home loan to fulfill their dream of becoming a homeowner. The Indian government provides certain tax benefits on home loans, which can help reduce the financial burden. Here are the home loan deductions available under the Income Tax Act for the assessment year 2024-25:
1. Deduction on Interest Payment
Under Section 24(b) of the Income Tax Act, individuals can claim a deduction on the interest paid on their home loan. For a self-occupied property, the maximum deduction allowed is up to Rs. 2 lakh per annum. In case the property is not self-occupied or is let out, there is no upper limit on the deduction. However, the actual interest paid or Rs. 2 lakh, whichever is lower, can be claimed as a deduction.
2. Deduction on Principal Repayment
Section 80C of the Income Tax Act allows individuals to claim a deduction on the principal repayment of their home loan. The maximum deduction allowed under this section is up to Rs. 1.5 lakh per annum. This deduction can be claimed along with other eligible investments such as EPF, PPF, life insurance premiums, etc.
3. Deduction on Affordable Housing Loan
In addition to the above deductions, individuals can also avail an additional deduction under Section 80EEA of the Income Tax Act if they have taken a home loan for an affordable housing property. This deduction is available up to Rs. 1.5 lakh per annum and is over and above the deductions mentioned earlier.
It is important to note that to claim these deductions, individuals need to provide the necessary documents such as loan statements, interest certificates, and completion certificates, among others. Additionally, it is advisable to consult a tax professional or chartered accountant for accurate guidance on claiming these deductions.
In conclusion, the Income Tax Act provides various deductions on home loans, helping individuals reduce their tax liability and make homeownership more affordable.
