When it comes to filing the Income Tax Return (ITR) for Home Loan tax exemptions, it is important to understand the different deductions applicable to you as a borrower. You can claim tax deductions for Home Loans under Section 24(b) and Section 80C for interest payments and principal repayment, respectively. There are other exemptions too that fall under Section 80EE.
Filing your ITR to claim deductions on your housing loan is simple. It is advisable to keep the necessary documents handy to complete the process of ITR filing easily. The following are the steps to file an ITR:
1: Organise Documents Required for ITR Filing
To file an ITR, you will need the following documents:
- Property ownership documents
- Certificate of purchase or construction
- Home Loan certificate with interest and principal details
- Municipal taxes receipt
- Financial and personal documents of the taxpayer
2: Submit the Documents to Your Employer
- Inform the employer to make TDS adjustments.
- This compliance is not mandatory for freelancers or self-employed Home Loan borrowers.
3: Calculate Your Home Loan Deductions
- Understand the deductions available for both self-occupied and let-out properties.
- Consult with a CA or your financial advisor before making your maximum deduction claim.
4: Claim the Actual Deductions
- Once you have completed all the necessary steps, visit the official website the Income Tax Department. Follow the given instructions and complete your Home Loan tax submission.
- Download your tax statement for verification.
Submitting a duly filed ITR is a key requirement for credit facilities such as a Home Loan. You can easily avail of a Home Loan with Bajaj Housing Finance if you have all the required documentation and meet our basic eligibility terms.
Read Also: Different Types of ITR Forms in India
Tax Benefits on ITR Filing for Home Loan Under Different Sections
If you have availed of a Home Loan, you can claim tax benefits available under these sections of the Income Tax Act, 1961:
Section 24(b):
Under Section 24(b), you can claim a tax deduction on the interest component of your Home Loan. You can claim up to a maximum amount of Rs.2 Lakh in a financial year. However, if the property is rented out, the entire interest component on the principal value shall be allowed as a deduction.
If you have availed of a Top-up Loan for renovation or repair, the maximum deduction is limited to Rs.30,000.
Section 80C:
Under Section 80C, you can claim deductions on the principal repayment of your Home Loan, with a maximum limit of up to Rs.1.5 Lakh. However, you cannot sell your property within five years of possession. Stamp duty and property registration charges are also eligible for deduction under Section 80C, as long as they are claimed in the same year the expenses were incurred. However, the claim must remain within the Rs.1.5 Lakh limit allowed under Section 80C.
Section 80EE:
If you are a first-time homebuyer, you can claim an additional Rs.50,000 as a Home Loan income tax rebate on the interest component, provided specific conditions are met. To be able to claim this deduction, you must be a first-time homebuyer with no other property in your name at the time of sanctioning of the loan. Moreover, the property's value must not exceed Rs.50 Lakh and the loan amount must be within Rs.35 Lakh. Additionally, you must have availed of a Home Loan between April 1, 2016, and March 31, 2017, to be eligible for this deduction.
Section 80EEA:
To be eligible for deductions under Section 80EEA, you must be a first-time homebuyer with a Home Loan amount of less than Rs.25 Lakh. The property value must not exceed Rs.45 Lakh and you must have availed of a Home Loan between April 1, 2019, and March 31, 2022. Also, keep in mind that only individual homebuyers can qualify for this benefit.
Frequently Asked Question
The ITR-1 form, also known as the ITR-1 Sahaj form, is an income tax return filing form to file the income tax. The ITR-1 form is for individuals with a total income not exceeding Rs.50 Lakh. It is most commonly used by salaried individuals. Some of the ineligible applicants for this ITR form include:
- Resident Not Ordinarily Resident (RNOR) and Non-Resident Indians (NRI)
- Individuals having agricultural income greater than Rs.5,000
- Individuals with more than Rs.50 Lakh of income
- Individuals whose income is derived from lottery, legal gambling, racehorses, and so on
- Individuals who have derived their income derived from business or profession
Your ITR helps in determining your cash flow, income, and financial stability. Filing ITR on time poses you as a reliable borrower.
Disclaimer
The information remains subject to change depending on the laws and government guidelines, applicable at the time being. However, Bajaj Housing Finance Limited (‘BHFL’) is under no obligation to update or keep the information current. Users are advised to seek independent legal and professional advice before acting on the basis of the information contained in the Website. Placing reliance on the aforementioned information shall always be the sole responsibility and decision of the User and the User shall assume the entire risk of any use made of this information.
In no event shall BHFL or the Bajaj Group, its employees, directors or any of its agents or any other party involved in creating, producing, or delivering this Website shall be liable for any direct, indirect, punitive, incidental, special, consequential damages (including lost revenues or profits, loss of business or loss of data) or any damages whatsoever connected to the User’s reliance on the aforementioned information.
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