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property loan
To brief, principal and interest paid on housing loan can be claimed as deductions u/s 80C and 24(b) respectively. Maximum limit u/s 80C is Rs. 1,50,000 and u/s 24(b) is Rs. 2,00,000 if the property is self-occupied, on the contrary, there's no limit u/s 24(b) if the property is let-out.
Contrary to popular belief, loan against property extends tax benefits to borrowers under Section 37(1) and Section 24(b). To elaborate, borrowers can claim tax benefits on the amount of interest paid and charges cleared, including documentation charge and processing under Section 37(1).
On the other hand, if the loan amount is used to purchase another house property, borrowers can claim interest up to Rs.2 lakh under Section 24(b). A borrower can put the funds to such usage to claim these benefits.
Intending property loan borrowers should thus become familiar with factors like Loan against property interest rate, eligibility criteria, loan value and tenor and tax benefits, among others. Doing so, they will not only be able to make an informed decision pertaining to the credit but will further be able to manage it smartly.
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