Do you know that you can get home loan tax benefits under Sections 80EE, 80C, and 24b of the Income Tax Act? Yes, as a home loan borrower, you can avail help from specific tax incentives as listed below –
- As per Section 80C, you can claim a deduction of up to Rs 1.50 lakh on the principal components, including registration and stamp duty charges.
- As per Section 24b, you are permitted to claim a maximum deduction of Rs 2 lakh on interest constituent.
- Additionally, as per the Section 80EE provision, you can claim an additional tax deduction of Rs 50,000 on interest payable annually. If you are servicing a joint home loan, you can even claim this additional deduction on home loan repayments. Here, the only caveat is that your home loan proceeds must not be more than Rs 35 lakh, and the property’s value must be within Rs 50 lakh. It is because every co-borrower can claim tax benefits on home loans separately.
However, due to the distinct conditions to avail of home loan tax benefits and differing amounts you can claim, tracking your transactions becomes extremely tough. Here is where a home loan tax benefit calculator can help you!
What is a home loan tax saving calculator?
As suggested by the name, a tax benefit calculator assists you in estimating the overall tax benefit amount you can claim in a financial year. The calculator asks you to input a few important details linked with your debt liabilities, gross income, etc., to display a clear picture of the taxable income.
Now that you know a home loan tax benefit calculator read on to understand how it estimates your tax deduction.
How does a tax saving calculator work?
A home loan tax benefit calculator requires details like your profile type (senior citizen or regular), gross annual income, housing loan payment, repaid principal amount, etc. Once you input these details, you must click on the ‘calculate’ option, and the estimated tax deduction will display automatically on the screen.
How can a tax saving calculator benefit you in planning your budget?
As a home loan is a huge and long-term commitment, you must not omit the tax incentives calculation before applying for it. To fix a prudent budget for your savings and repayments, you require details about all your expenses and income sources, including tax benefits that you can avail of. Here’s where a home loan tax saving calculator can help you.
Ensure to follow the listed steps to calculate –
- Select a preferred online home loan tax benefit calculator
- Input the EMI figure along with information about your annual income, profile type, and principal repaid
- Next, click on submit button
It is this simple.
However, if you are a new applicant, selecting the right lender per your home loan eligibility and preference is just as vital. For this, turn to an online home loan eligibility calculator to know the different home loan plans available to you as per your eligibility. Alongside estimating your home loan tax benefit, the calculator allows you to plan your budget.