Tax Benefits on Home Loans: Fact or Myth?
Buying a home is not just an emotional milestone—it’s also a smart financial move when considering the tax benefits of home loans. But how real are these benefits? Let’s separate fact from myth and understand how these exemptions can help you save big, particularly if you’re eyeing a premium property like Birla Evara by Birla Estates on Sarjapur Road, Bangalore.
Fact 1: You Can Claim Deduction on Interest Paid
Under Section 24(b) of the Income Tax Act, you can claim a decrease of up to ₹2 lakh per financial year on interest paid on your home loan, provided the property is self-occupied. If it’s rented out, there’s no upper cap, making this a powerful benefit for investors in Bangalore’s growing suburbs like Sarjapur Road.
Fact 2: Principal Repayment is Also Deductible
Yes, that’s right! Under Section 80C, the principal amount of your EMI is eligible for a deduction of up to ₹1.5 lakh. This adds up to your total annual tax savings when combined with other 80C investments like PPF and ELSS.
Fact 3: First-Time Buyers Get Extra Benefits
If you are purchasing your first home, you may be eligible for an additional ₹50,000 deduction under Section 80EE, or up to ₹1.5 lakh under Section 80EEA if certain conditions are met—especially on affordable housing projects. Buyers should consult with financial advisors to know these options.
Myth: All Homebuyers Automatically Qualify
Not entirely. You must meet specific eligibility criteria, including loan amount, property value, and usage type. Also, the loan should be taken from a registered financial institution.
Myth: Under-Construction Properties Offer Full Benefits
Only interest paid during construction is eligible for tax deduction—after possession—in five equal installments. So if you’re buying an under-construction project like Birla Evara, your deductions start post-possession.
Tax benefits on home loans are very real—not a myth—but they require awareness and timely planning. If you’re considering investing in a reputed project like Birla Evara on Sarjapur Road, Bangalore, now is a great time to leverage these financial perks smartly.
