Skip to main content

Home Loan Tax benefit under Section 80C

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)
 

 

As explained earlier that housing loan EMI consists of Principal and interest. The principal portion of housing loan EMI paid in a financial year is eligible for tax benefit u/s 80C upto a maximum limit of Rs 1 lakh per year. Other Section 80C components for tax saving are PPF, ELSS, Life insurance premiums, NSCs, 5 year bank fixed deposit etc. The total cap of section 80C investment is Rs 1 lakh which is inclusive of this principal payment in housing loan.

But here is one condition; you can claim this section 80C benefit on principal home loan payment only in the case of self-occupied house.

Only exception is if the house is not in the city you work in.

For example: if you live in Delhi due to your job and the house that you are paying EMI for is in Chandigarh, than in that case you are eligible for the section 80C benefit on principal portion of the EMIs. Or you should be staying in that particular house to claim for Section 80C tax benefit.

Housing loan tax benefit u/s 24

The interest portion of housing loan EMI paid in a financial year can be claimed as deduction u/s 24 up to a maximum limit of Rs 1.50 lakh per year. Interest payment is considered as expense under the head "income from house property".

The best part in tax benefit under section 80C and section 24 with respect to housing loan EMI is that there's no limit on "Self occupied houses". Say for example you work in Delhi, but you have one house in Chandigarh and other in Mumbai, for which you are paying housing loan EMIs, You can claim benefit of Section 80C and Section 24 for both of houses under self-occupied category within the maximum limit u/s 80C which is Rs 1 lakh and u/s 24 which is Rs 1.5 lakh, combining the total principal and Interest payment of all the houses. Do note that both benefits can be claimed only after taking possession of house.

Some conditions to avail this benefit:

Maximum interest allowed in aggregate of Rs 1.50 lakh per year, if the following conditions are satisfied-

a) Loan is utilised for construction or acquisition of house on or before 1-4-99.

b) Construction or acquisition of house should be complete in maximum of 3 years starting from the end of financial year in which capital is borrowed.

One more interesting point here is that section 24 tax benefit can be claimed even if the loan is raised from friends, family or relatives. If you have good inflow of income and then by doing tax planning early in life you can create different tax files in the family and can use them for your own tax benefits. This way you can save on the interest payment to bank, and also be able to claim tax benefit on your own income. Do note that this benefit can only be claim against the certificate issued by the loaner and he has to pay tax on the interest received against this loan

Special tax incentive announced for people taking first home loan up to Rs 25 lakh in FY 2013-14 (Section 80EEE). In this scheme additional interest deduction of Rs 1 lakh is offered only for one year. If one could not exhaust the full Rs 1 lakh in 2013-14, then he can carry forward the balance to next year. Please note this is over and above the deduction of Rs 1.5 lakh and of course with many additional conditions.

Pre EMI interest

Pre EMI interest can be claimed in 5 equal installments starting from the financial year in which possession has been taken. For example you have paid pre EMI interest as under

Starting 2010-11 till 2014-15, you can claim PRE EMI interest deduction of Rs 1,80,000(20%) which comes to Rs 36000/-, along with the interest you pay in those years. But do note that total interest payment benefit should not exceed Rs 1.50 lakh in any financial year.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

ICICI Prudential Dynamic Plan Invest Online

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   ICICI Prudential Dynamic Plan             Invest Online This fund does remarkably well during falling markets, but fails to show the same prowess during a rising market. The fund sticks to its mandate to adapt to the dynamic nature of the market by shuttling between debt and equity. It takes aggressive asset calls in equity when the market surges by investing in quality mid-cap stocks. At the same time, it adopts a defensive strategy by investing in debt and cash when markets get overvalued, making it a good long-term choice.     For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call     Leave a missed Call on 94 8300 8300   Leave your comment with mail ID and we will ...
Read more

Group Health Insurance

Buy Group Health Insurance Online   For Human Resources, the biggest challenge today is to decide whether medical benefits should be offered to employees or not, what type of plans should be offered, what will be the cost and how will the cost be split between employees and employer. Well, most of these are subjective and would depend on a lot of factors including company size, average employee salary, etc. However, this article will give you a fair idea on how you should go about deciding these factors: 1. Why offer group health insurance benefit to employees : Studies have proved that retention rates among employers offering GHI are much higher than the ones who are not offering. Moreover, the cost of providing this benefit as a percentage of salary is very low as compared to the perceived value. As an example, say if average salary of an employee in your organization is 4 LPA. If you decide to offer a health insurance benefit to him for a Sum insured of ...
Read more

Lump Sum or SIP?

Invest Mutual Fund Online     You have a lump sum in hand and you wish to invest in equity funds. However, you have heard a lot of talk about investing in equity funds through Systematic Investment Plans (SIPs) because they help average costs, ensure you do not ill-time the market, and help you invest in small sums, besides giving you many other advantages. So, should you invest the money you have in hand in one go, or let it remain in your bank account and then do an SIP? There is no harm in investing a lump sum amount. For all you know, compounding, over the long term, could work better with lump sum. However, make sure you fulfill all of these three criteria if you want to invest in one go. Else, SIP is the way to go. #1: You invest for the long term According to past data, ideally, if you have a time frame of 12 years or more, you can consider lump sum investing (provided you satisfy the other two conditions that follow). So, what is the sanctity behind 12 years? Is it because only...
Read more

Birla Sun Life MIP II Savings 5

  Birla Sun Life MIP II Savings 5 - Invest Online   Have you traditionally been a debt investor but now wish to test waters in equities? Then, debt-oriented funds such as Birla Sun Life MIP II Savings 5 (Birla Savings 5), which have limited exposure to equities, may fit your requirement. With a five year return of 10.5 per cent compounded annually, the fund managed a good 3-3.5 percentage points more than its benchmark Crisil MIP Blended Index, as well as its category average. The fund appears well poised to capitalise on a falling interest rate scenario and has increased the average portfolio duration of its debt instruments in recent times. Suitability Birla Savings 5 is suitable only for conservative investors. If you want to make a beginning in equities and cannot take any short-term declines in your stride, then this fund will suit you. If you are already an equity investor and want to use a debt-oriented fund merely as a diversifier, then you may prefer peers from the HDFC and Re...
Read more

Mutual Fund Review: Reliance Regular Savings Balanced

Reliance Regular Savings Balanced fund has shown great resilience during market crash After a shaky start, this fund has established itself as a strong contender in this space. In the past three years it has ridden the market well by not only delivering during the market run-ups but also displaying resilience during the crash. In 2008, it witnessed the second lowest fall among its category and last year it was amongst the top three performers with a return of 76 per cent (category average: 61%).   The poor underperformance in 2006 can well be credited to the low equity allocation of the fund, which stood at just over 10 per cent for only four months that year. Though the fund has the leeway to go up to 75 per cent in equity, it has never touched that limit. In fact, it has exceeded 70 per cent in just five months in its entire history. During the crash of 2008, the fund managers had no problem going right down to 54 per cent (equity exposure). Fund managers Omprakash Kukian and A...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now