To be able to purchase your own home is one of life’s many major achievements. The wonderful news is that there are several ways today to help you buy your dream home without even digging a hole in your pockets. Per the provision for income tax deductions following Section 80C, a salaried or self-employed individual can avail of several home loan tax benefits and be eligible to invest in housing property.
The sum of money that you pay against your housing loan in India has two crucial components, and taxpayers can get a rebate on each of those:
- Deductions following Section 80C provide tax-related benefits of up to Rs.1.5 lakh on the home loan principal repayment
- Deductions following Section 24 provide tax-related benefits of up to Rs.2 lakh on the home loan interest amount
- Additional deductions following Section 80EE provide tax-related benefits of up to Rs.50,000 on the interest paid for first-time borrowers
All You Need to Know about the Income Tax Calculator AY 2022-23
Here’s how the Indian laws have made it relatively easier for first-time home buyers to get their hands on their dream house in a few seconds. Calculating home loans has never been more seamless. Any advanced tax calculator 2022 can help determine the exact amount to be paid after eligible tax deductions. Being a smart and intuitive tool, the calculator factors in all the elements to calculate the amount, such as the gross annual income, home loan interest rate, home loan principal amount, housing loan EMIs, current tax implications and deductions, based on the current financial year, etc. The tool is both convenient and user-friendly, permitting you to insert details in a hassle-free manner.
FAQs on Home Loan Income Tax Calculations
Some of the most frequently asked questions on home loan tax benefits and using the tax calculator 2022 are addressed below.
What is a home loan income tax calculator India?
A home loan tax benefit calculator is one of the most appropriate tools that can help calculate the income tax deduction on you home loan. By providing it with the basic information about your housing loan application, the tool will can tax implications reliably and accurately.
What are the benefits of using a tax calculator 2022?
Home loan applications can be financially draining for many aspiring borrowers. With the help of a tax calculator 2022, borrowers can find the exact amount they could be saving following the tax deductions. This helps one prevent spending extra money than what a borrower had initially thought of or planned for.
How to claim income tax exemption on home loan?
Like any other tax benefit under the Income-tax deductions, you can claim one on your home loan by filling the details in the income tax return form and submitting it to the HR department of your organization. Once the evaluation is done, they can minus the tax at the source of your income.
How much income tax can be saved on a home loan?
The amount of money you are likely to save on your housing loan depends on a host of factors, including the ownership of the housing property. For self-occupied properties, there is a cap of Rs.2 lakh per Section 24. For non-self-occupied properties, however, there is no such limit. Following Section 80C, you’re eligible for income tax deductions up to Rs.1.5 lakh and per Section 80 EE, income tax deductions are restricted to Rs.50,000.
How to calculate home loan tax benefits?
Using any lender’s standard tax calculator 2022, you can get the amount entitled to tax exemption on a home loan simply by providing details, such as the home loan interest rate, home loan principal amount, annual income, ownership, and so on.
How is tax deduction calculated for a home loan in India?
Tax exemption is nothing but a basic calculation that takes into consideration a borrower’s income, the home loan principal amount, current income tax implications, and home loan interest rate. Once added, the income tax calculator runs its algorithm to give your income tax liabilities along with the savings.
What should I know about tax deductions on a second home loan in India?
With effect from the assessment year 2020 to 2021, the tax deduction on home loan interest is permitted in respect of two residential properties that are self-occupied. However, the total deduction per this provision will remain the same i.e., Rs.30,000 or Rs.2 lakh, based on the case; otherwise the tax deduction will be limited to Rs.30,000.
We’ll share with you a pro tip – add a co-applicant to your home loan. The advantage of adding a co-applicant is that it boosts your home loan eligibility for a significantly higher loan amount because, in such scenarios, the lenders consider the loan repayment capacity and credit scores of co-applicants.
And in cases where the co-applicant is a female family member, a majority of lenders offer a home loan interest rate concession of up to 0.05% to women borrowers. Hence, adding an earning female family member as a co-applicant to your home loan can help get the home loan at a lower interest rate.