Many sections of the Income Tax Act, 1961 comes under the category where one can claim deductions for expenses and investments incurred during a specific fiscal year. Such deductions can surely help in bringing down one’s taxable income and also lessen the liability for taxes.
In the same context, let’s quickly see when you can revoke home loan tax deductions via this post.
In most of the cases, a lock-in period is defined against which one may have opted for a deduction. If you don’t observe the lock-in period, the loan deductions that you got can be cancelled or revoked.
Here is some quick information about the lock-in period that should be observed in case if you have claimed deductions against the home loan principal amount repayment.
There is no such specified lock-in period for deduction claimed against home loan interest payment as per Section 24(B) or 80EE.
The Section 80C(5), related to principal repayment informs that if you sell your house home within 5 years from the purchase date, then the deduction claimed on home loan principal repayment during earlier years can be revoked or get cancelled.
In such a case, you will also need to club all deductions claimed for the home loan principal repayment and added to the income of the year of sale and be taxed accordingly. It is allowed the Section 80C of the Income Tax Act., 1961.
Also, in addition to the home loan principal figure, the registration fee and stamp duty paid for property’s registration also qualifies for deduction as per the Section 80C in the purchase year. Hence, if you have claimed a deduction against stamp duty and registration fee even then you need to observe a lock-in period of 5 years.
The current deductions on a home loan facility
If you avail, any home loan offers for building or buying a house, the principal repayment and interest paid on the loan qualify for deductions. It can be achieved as per many sections of the Income Tax Act. The principal repayment comes under Section 80C of the Income Tax Act. The Section has a provision of a total of Rs.1.5 lakh a year to be counted as deductions of principal repayment. On the other hand, Section 24(B) of the Act up to a total of Rs.2 lakh/year under the home loan interest component.
If you are a first-time homebuyer, then you can claim an extra deduction of Rs.50,000 on home loan interest payment under the Section 80EE of the Income Tax Act.
Availing a home loan not only helps you get the required funds for buying a house of your dream but even enables you to save taxes.
The Income Tax Act also has some provisions for revoking or the cancellation of the same which you went through via this post. If you have doubts, then you should get in touch with a known Income Tax expert to know more.
If you are ready to move into a home of your dream, then leading lenders can offer you the best home loan in India with a large amount. If you have a robust CIBIL Score, repayment and employment history, then you can get the best home loan interest offers.