Taxes – the word alone is enough to send shivers down many people's spines. However, it's time to take a step back, breathe, and realize that the tax world isn't all doom and gloom. In fact, there are certain sections of the Income Tax Act that can actually work in your favor and put some money back into your pockets. Today, we're going to delve into the realm of tax deductions under Section 24(b), 80EE, and 80EEA, and demystify the benefits they bring.
Interest on Home Loan Deduction Owning a home is a dream many of us cherish, and the Indian Income Tax Act provides some relief in the form of deductions on the interest paid on a home loan. Under Section 24(b), individuals can claim deductions on the interest paid on a home loan for up to ₹2 lakh per financial year. This is applicable for a self-occupied property. If you're living in the house yourself, you can breathe a sigh of relief as this deduction is applicable to properties you reside in. This deduction is not tied to any upper limit of income, so whether you're a salaried individual or a self-employed professional, you can avail of this benefit.
First-Time Home Buyers For those venturing into the realm of real estate for the first time, there's an added bonus waiting for you in Section 80EE. This section allows first-time home buyers an additional deduction of up to ₹50,000 on the interest paid on a home loan.
The loan must be sanctioned between April 1, 2016, and March 31, 2017.
The value of the property should not exceed ₹50 lakh.
The loan amount should not exceed ₹35 lakh.
The taxpayer should not own any other residential property on the date of the loan sanction.
Affordable Housing Deduction The government has also extended its helping hand to promote affordable housing through Section 80EEA. This section provides an additional deduction of up to ₹1.5 lakh on the interest paid on home loans for affordable housing properties.
The loan must be sanctioned between April 1, 2019, and March 31, 2022.
The stamp duty value of the property should not exceed ₹45 lakh.
The taxpayer should not own any other residential property on the date of the loan sanction.
These sections of the Income Tax Act are like hidden treasures waiting to be discovered. Whether you're a seasoned homeowner or a first-time buyer, these deductions can make a significant difference in your tax liability. Remember to keep proper documentation and adhere to the conditions mentioned in each section to make the most of these benefits.
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