Purchasing a home is a dream that most people carry in their hearts. And completive home loan interest rates make it possible for you to buy the home of your choice. But did you know that home loans can also help you save tax? Sections 80 EE and Section 24 of the Income Tax Act, 1961, offer tax benefits on the interest repayment of a home loan.
Here are the provisions of both these sections that you should know of:
Difference between Section 80 EE and Section 24 home loan tax exemption
|Point of difference||Section 24||Section 80 EE|
|Inclusions||Section24 offers tax benefits on the interest repayment. The loan can be for any type of real estate property.||Section 80 EE offers tax benefits on the repayment of home loan interest rates for a residential home loan only.|
|Loan purpose||You can enjoy tax benefits on a loan taken for the construction, purchase, renewal, repair, or reconstruction of a residential property.||You can enjoy tax benefits only on loans taken for the purpose of purchase of a new home or the construction of a home.|
|Eligibility criteria||You can only claim this tax benefit if the purchase or construction is completed within 5 years.||You can only claim this tax benefit for your first property. Also, you should not own any other property at the time of the loan application.|
|The permitted amount for a tax deduction||You can claim up to Rs. 2 lakhs for a self-occupied property. There is no limit for a non-occupied property.||You can claim up to Rs. 50,000 for your home loan. This is over and above the limit of Rs. 2 lakhs under Section 24.|
|Limitations and conditions||There are some other conditions to avail tax benefits under Section 24, such as:
||There are some other conditions to avail tax benefits under Section 80 EE, such as:
To sum it up
Section 80 EE and Section 24 can help you reduce your tax liabilities substantially. So, make sure to use them when you file your income tax returns. It is also important to note that these sections offer benefits only on loans sanctioned by a financial institution or a housing finance company. So, remember to always pick a reputable lender and use the home loan EMI calculator to assess your loan needs and have the loan disbursed as soon as possible.