Buying a home is a cherished dream for many, and the government incentivizes this aspiration through attractive income tax benefits on housing loans. These benefits can significantly reduce your tax burden and make owning a home more financially accessible. Let’s delve into the key perks you can enjoy:

1. Deduction on Interest Paid:

• Up to Rs. 2 Lakh per year: This is the standard deduction you can claim on the interest paid on your housing loan for a self-occupied property. This limit applies throughout the loan tenure.

• Home loan interest 

• Additional Rs. 1.5 Lakh for Affordable Housing: If your loan is for an affordable housing property (loan sanction date between April 1, 2019, and March 31, 2022, and stamp duty value up to Rs. 45 lakh), you can claim an additional deduction of up to Rs. 1.5 Lakh on the interest paid.

2. Deduction on Principal Repayment:

• Up to Rs. 1.5 Lakh per year: Under Section 80C of the Income Tax Act, you can claim a deduction of up to Rs. 1.5 Lakh per year on the principal amount repaid on your housing loan. This deduction is available for both self-occupied and let-out properties.

• Home loan principal

3. Joint Loan Benefits:

• Double Deductions: If you take a joint home loan with your spouse, both of you can claim individual deductions on the interest paid and principal repaid up to the respective limits. This effectively doubles the potential tax savings.

4. First-Time Home Buyer Advantage:

• Additional Deduction of Rs. 1.5 Lakh: If you’re a first-time home buyer (no previous ownership of any residential property), you can claim an additional deduction of up to Rs. 1.5 Lakh on the interest paid on your housing loan. This benefit applies to loans sanctioned between April 1, 2019, and March 31, 2024, with a stamp duty value of up to Rs. 45 lakh.

5. No Upper Limit for Let-Out Property:

• Unlimited Deduction on Interest: If you rent out your loan-financed property, you can claim an unlimited deduction on the interest paid on your housing loan. This makes investing in rental properties even more attractive from a tax-saving perspective.

Remember:

• These benefits are subject to change based on government policies and budget announcements.
• Consult a tax advisor for personalized guidance based on your specific situation and loan details.