Purchasing a home endows you the comfort of residing in your own house and even offers financial security to you and your family. Many of you tend to attain this goal of becoming a homeowner by availing a home loan but are not aware of how you can enjoy considerable home loan tax benefits while repaying your loan EMI. In reference to home loans, as per the Income Tax Act, you can get exemption on both interest and principal repayments.
Home loan EMI repayment is categorised into principal and interest constituent on a home loan. However, to get principal and interest repayment exemption, there are specific limits. According to Section 80C, you can get a tax deduction of maximum Rs 1.50 lakh on the principal constituent, including the stamp duty and registration charges. And according to Section 24b, you can get a tax deduction of up to Rs 2 lakh on the interest component.
To be aware about the tax exemption figure on your home loan repayment, you must know how it is computed. Here is where a home loan tax benefit calculator can help you. To put this simply, with a home loan tax saving calculator, you can simply calculate your tax benefits before you apply for a home loan.
How does the tax benefit calculator work?
Online tax saving calculator needs your details like gross annual income, profile type, principal amount repaid etc. Once you enter these details, all you need to do is click on the compute option and the accurate tax deduction amount will display on the screen automatically.
How can a home loan tax benefit calculator help you with budget planning?
As a home loan is a long-term commitment that involves a massive amount, you must not eliminate the tax incentive computation before you apply for home loan. For fixing a suitable budget for your repayments, you require accumulating all details about your expenditures and income earnings, including the tax benefit available to you. Here is where a tax benefit calculator can assist you.
Follow the below mentioned steps to compute your tax savings on a home loan –
· Choose the preferred online tax benefit calculator
· Place in the EMI constituent along with the details about your profile type, annual income and principal repaid.
· Click on the submit option
Besides estimating your tax savings, the home loan tax benefit calculator also permits you to prepare a prudent budget. However, in case you are a new home loan seeker, you must choose the correct lender as per your preference and eligibility before you apply for a home loan. For this, you may use the home loan eligibility calculator available online.