Home loan benefits from March 31st, 2022
Which home loan benefits cannot be availed from March 31, 2022?
Having our own home is a dream for all of us, but as the economy is growing at a rapid pace and everything is becoming too expensive, we cannot afford to buy our dream home without a home loan. In 2019, when the budget was presented in the Lok Sabha, the center announced additional income tax benefits for home loaners for Rs 1.5 lakhs, which was then extended in the budgets of 2020 and 2021 owing to the difficulties faced by the people due to the sudden Covid-19 Pandemic. But now, in this year's budget, the additional tax deduction of Rs 1.5 lakhs under section 80EEA of the Income-tax Act, 1961 has not been extended further.
To avail of this tax deduction facility, a person must get a home loan approved before March 31, 2022. By availing this facility for affordable housing, an individual can claim the maximum deduction of Rs.3.5 lakhs for the interest being paid, from the total gross income of the loaner, under sections 80 EEA and 24.
The Essential Factors of a Home Loan EMI
There are two components, and a person can have two tax breaks as per the income tax laws on the home loan EMIs. These components are:-
- Principal Repayment: As per Section 80C, the home loaner can enjoy up to Rs 1.5 lakhs on the principal amount.
- Interest paid: As per Section 24(b), the home loaner can enjoy up to Rs 2 lakhs on the interest in one financial year.
The criterion to fall in this category of additional interest relaxation:
- You must have a property with a stamp duty valuation of up to Rs 45 lakhs.
- Any financial institution must sanction the home loan between the specified period, i.e., from April 1, 2019, to March 31, 2022.
- The individual who needs the loan must not possess any residential property before the loan sanctioning date.
How can a home loan EMI calculator help in understanding the benefits?
A home loan calculator/loan eligibility calculator is essential to understand your home's EMI in advance. This helps you make informed and practical decisions as you can now manage and plan your cash flows easily. You can easily calculate your home loan EMI by entering the loan amount, tenure, and home loan interest rate and clicking on calculate on any leading financial institutions' websites. That will automatically show the monthly installment you need to pay.
Can this tax benefit be availed on two home loans?
This is a question that perplexes a lot of people. The tax benefits are available only on self-occupied homes, which means the other house will be considered let-out property, and you will be charged as per the applicable tax slab.
Will I be eligible for tax benefit if I receive the loan sanction letter before March 31, 2022, but the loan disbursal in the next financial year?
Yes, under Section 80 EEA, you will be eligible for the home loan tax benefit in this condition. To avail of the maximum tax benefit and save some pennies on loan, one must get the home loan sanctioned before March 31, 2022.
