Budget 2019: You can save more on your home loan EMIs; how Modi-govt can help you buy your dream house
Budget 2019: Every month you have to chalk down an expense, in regards to repayment of home loans in the form of EMIs which includes a portion of principal amount and banks interest rates. Of course, you get an income tax return benefit from this.
It is Budget 2019 day and the announcements will come fast and furious in just 90 minutes! Excitement is at high level on the expectations of a host of good news coming from FM Piyush Goyal and Prime Minister Narendra Modi government. This time, a ray of hope has also emerged for home loan borrowers as well, in regards to their EMIs. It needs to be noted, that every borrower can opt for loans depending upon a host of eligibility checks like income, previous debt, bank account transactions and most importantly credit score. This checklist is to ensure that you are capable enough to repay your debt. Once, you clear the criteria points of a bank, you are free to avail a home loan. Debt which is the beginning of burden days for you, as every month you have to chalk down an expense, in regards to repayment of home loans in the form of EMIs which includes a portion of principal amount and banks interest rates.
But how would you feel, if you know that there is a possibility where you can save massive on your home loans EMIs? Surprise! This is exactly what is being expected from interim Finance Minister Piyush Goyal today.
Analysts at Arihant Capital believes that is working on a slew of measures to support farmers, including introduction of a new direct income support scheme, a revamped crop insurance scheme and agriculture crop loans at zero interest rate.
One of the key highlights that, these analysts expect are increase in the home loan deduction limit. Our tax laws are filled with great rewards in the form of tax deductions for owning a house.
Archit Gupta, Founder & CEO ClearTax said, "Home loans are the most common and quickest route to becoming a home owner – unless you are one those rare breed of savers who save the entire money required to buy a house first and then invest. If you have availed a home loan, tax saving is the biggest silver lining you have every year as you pay your way towards complete loan repayment."
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These are the current tax benefits given on your home loan, as per ClearTax. They can be expected to rise in this Budget providing in much more claims on your EMIs.
Section 80EE allows income tax benefits on the interest portion of the house property loan availed from any financial institution. The deduction allowed under this section is for the interest paid on a home loan for up to a maximum of Rs 50,000 per financial year.
A home loan must be taken for the purchase/construction of a house and the construction of the house must be completed within 5 years from the end of financial year in which loan was taken. If you are paying EMI for the housing loan, it has two components – interest payment and principal repayment. The interest portion of the EMI paid for the year can be claimed as a deduction from your total income up to a maximum of Rs 2 lakh under Section 24.
For Assessment Year 2018-19 maximum deduction for interest paid on Self Occupied house property is Rs 2 Lakh. For let out property, there is no upper limit for claiming interest. However, the overall loss one can claim under the head of House Property is restricted to Rs 2 lakh only.
The Principal portion of the EMI paid for the year is allowed as deduction under Section 80C. The maximum amount that can be claimed is up to Rs 1.5 lakh.
Major analysts like CARE Ratings, Nirmal Bang and ICICI Securities among others have already predicted the limit under section 80C to rise further to Rs 2 lakh.
With this tax benefits, home buyers will be even more motivated to opt for loan in buying their dream house, as the interest they pay can be claimed which is one major relief.