Home loan

Income tax: this home loan service can no longer be used after March 31

Income tax: Effective April 1, 2022, the central government will remove the tax benefit under Section 80EEA for first-time home buyers. In the 2019 budget, the center had announced a supplementary budget 1.50 lakh tax benefit for home loan borrowers, who buy their first property with a stamp duty valuation of up to 45 million. Later in the 2020 and 2021 budgets, this facility was extended for one year respectively. However, according to tax and investment experts, if a new home loan borrower receives a home loan sanction letter before March 31, 2022 and obtains a disbursement in FY23, they will be able to apply for this additional benefit of income tax exemption for the entire period of occupation of the house. ready.

Speaking on how an Income Taxpayer still has the option to claim this benefit when filing the Income Tax Return (ITR); Mumbai-based tax and investment expert Balwant Jain said: “When filing an ITR from the following financial year, a taxpayer will not be able to claim tax benefit under Section 80EEA because this tax benefit ends on March 31, 2022. However, in case, a taxpayer plans to buy their dream home in the next fiscal year, they still have a chance to avail this income tax exemption benefit until 1.50 lakh interest payment on a home loan in a single fiscal year.”

Highlighting the window of opportunity available to a taxpayer, Balwant Jain said: “A home loan borrower can claim a tax benefit under Article 80 of the EEA, if he has a home loan sanctioned between the 1st April 2019 and March 31, 2022. So if a new borrower receives a home loan sanction letter by March 31, 2022 and obtains a disbursement in the next fiscal year, they will be eligible for a tax benefit up to 1.50 lakh interest on home loans paid in a financial year under Section 80EEA.”

Echoing the views of Balwant Jain; Pankaj Mathpal, MD and CEO of Optima Money Managers said, “This facility will be available to a home loan borrower for the full term of the home loan provided the borrower is a first time buyer and does not have any Most it is important to note that this benefit is also available on the EMI repayment of the home loan under construction, whereas under Section 24(b) a home loan borrower may request a tax benefit on a maximum of Interest payment of 2 lakh after taking possession of the property.”

In accordance with income tax rules, effective April 1, 2022, a home loan borrower will receive two tax benefits under Section 24(b) and Section 80C of the Act. income tax. Under Section 24(b), a homebuyer may claim an income tax deduction up to 2 lakh in a fiscal year on the interest component of his EMI home loan. However, this benefit can be claimed after taking possession of the property. Under Section 80C, borrowers may receive a tax benefit of up to 1.5 lakh on the principal amount paid through the EMI home loan.

To subscribe to Mint Bulletins

* Enter a valid email

* Thank you for subscribing to our newsletter.

Source link