Calculate Tax Benefits on Your Housing Loan Within Minutes Using this Home Loan Tax Benefit Calculator
When you buy a home, the total cost of buying a home includes several components other than its purchase price. It includes the home loan interest, stamp duty and registration charges, and other costs. This way, the overall cost of buying a home can really add up and hence the Income Tax Act, 1961 provides tax benefits for homebuyers when they apply for a home loan. When you claim these tax benefits, your income tax liability reduces as does the cost of buying your home. By using a home loan tax benefit calculator, you can instantly get an idea of how much tax you can save.
How to calculate tax benefits using the home loan tax benefit calculator?
A home loan tax-saving calculator essentially calculates the tax benefits you can claim against the Equated Monthly Instalments (EMIs) you make towards your home loan in a year. Hence, to calculate your home loan tax benefits, you first need to know what your EMIs are going to be. For this, you can make use of the home loan EMI calculator. When you do this, you will get to know the loan interest rate and tenure for the loan amount you are opting for as well as your home loan eligibility. The home loan EMI calculator will give you a home loan amortization schedule which will show the details of your EMI payments over the home loan tenure.
Once you have your EMI details, you can use those for the tax-saving calculator. The home loan tax benefit calculator will also require you to enter details such as your annual income and your tax-saving investments. These two details are important because depending upon your income and your current tax-saving investments, you will be eligible for the home loan tax benefits under section 80C, section 24b, section 80EE, etc.
Home loan tax-saving sections
There are four sections under which you can claim tax benefits for when you apply for a home loan. These benefits are for both the home loan principal amount as well as the interest component of the EMI. The first section is section 80C under which you can claim deductions of up to Rs 1.5 lakh for your home loan principal payments. The second section is 24b under which you can claim deductions of up to Rs 2 lakh for the interest payments made towards your home loan.
For first-time homebuyers, there are also sections 80EE and 80EEA under which you can claim additional tax deductions for interest payments. The limit under section 80EE is Rs 50,000 per year while it is Rs 1.5 lakh under section 80EEA. There are certain conditions regarding the home value and home loan utilisation that need to be met to claim these home loan tax-saving benefits. Hence, make sure you speak with your financial advisor or the lender to be sure about the tax-saving conditions before you apply for home loan.