Here are five important points which you need to know about the repayment of home loan.
Section 80C of the Income Tax Act
The principal repayment component in the Home Loan EMI is allowed as deduction under Section 80C of the Income Tax Act.
Maximum Tax Deduction: Rs 1.5 lakh
The maximum tax deduction allowed under Section 80C is Rs 1.5 lakh, which includes investments in other instruments also.
Deduction is allowed after completion of construction
The deduction is allowed only after the construction is complete and completion certificate is awarded to the buyer.
Registration charges are also allowed to be claimed for deduction
Payment made towards stamp duty and registration charges are also allowed to be claimed for deduction under Section 80C in the year in which payment has been made.
What will happen if assesse transfers the property within 5 years?
If the assesse transfers property on which he has claimed tax deduction under Sec 80C before 5 years, deduction claimed shall be deemed as income in year that the property was sold and taxable accordingly.