How to claim housing loan interest in income tax return?
Housing loans are very helpful and Getting benefits with the help of a home loan is very simple. A housing loan increases your investing ability and provides tax benefits such as tax deductions in the income tax return. The limit of interest you claim for your home loan deduction was increased to Rs. 2 lacs in the financial year 2014-15. If you want to claim home loan interest in your income tax return then follow the steps mentioned below.
Documents Required :
- The first thing required for the tax deductions is the ownership details of the concerned property. The co-owner can also claim the benefits but he/she will have to justify the share in the property and the tax deductions will depend on that share.
- The documents related with the date of purchase of the property are very important because the tax deductions will be offered with respect to that date. There is also an option of pre-construction interest.
- The details of the home loan borrower because the borrower or borrowers can only claim the tax deduction on the income tax return.
- Bank certificate or the certificate from the housing finance company and the details of the municipal taxes are also needed.
Submission of Documents :
- The documents are not submitted to the Income Tax Department. The applicants have to submit the above mentioned documents to their employer for the TDS adjustment which will save you a lot of time.
- In the case of self employed applicants, The documents are used to calculate advance tax liability for each quarter.
Calculation of Income from the House :
For a house in which the applicant is living, the amount of the deduction is limited to Rs 2 lacs. Whereas, In the case of a let-out house property, there is no limit on the amount of interest you can claim as a deduction. From the financial year 2017-18 onwards, the deduction for housing loan interest on the let-out property is also limited to the extent to which loss from that property does not cross Rs 2 lacs.
Claiming the Interest :
As per Section 80C of the Income Tax Act, Tax deductions on the income tax return can be claimed for the repayment of the principal and interest rate of the home loan. The tax deduction amount is Rs 2 lacs. In the case of a rented property, The full amount paid as interest is allowed as a deduction.
Getting a deduction on income tax is not very complicated. The details about the borrower as well as ownership of the property are needed for claiming the tax deductions on the income tax return. It is very helpful for any borrower because it saves them a lot on income tax. A home loan has many benefits increased investing ability, sources to improve credit scores, and tax benefits. Getting the ownership of a property and getting tax benefits for the home loan repayment. It can be very beneficial and with the help of the above-mentioned steps, Any home loan borrower can claim tax deductions.