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 benefit from specific tax incentives as listed below –
- As per Section 80C, you simply can claim a deduction of up to Rs 1.50 lakh on principal component 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 additional tax deduction of Rs 50,000 on interest payable per year. Here, the only caveat is your home loan proceeds must not be more than Rs 35 lakh and value of the property must be within Rs 50 lakh. In case you are servicing a joint home loan, you even can claim this additional deduction on home loan repayments. It is because every co-borrower is allowed to claim tax benefits on home loans separately.
However, due to the distinct conditions to avail 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 to estimate the overall tax benefit amount you can claim in a financial year. The calculator just 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 as you know what home loan tax benefit calculator is, read on to know 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, principal amount repaid etc. Once you input these details, all you require doing is clicking on ‘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 calculation for tax incentives before you apply 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. 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.
Alongside estimating your home loan tax benefit, the calculator even allows you to plan out your budget. However, if you are a new applicant, selecting the right lender as per your home loan eligibility and preference is just as vital. For this, turn to an online home loan eligibility calculator to know different home loan plans available to you as per your eligibility.