Purchasing a home offers you the comfort of residing in your own house and even provides financial security for you and your family. Many of you tend to attain this goal of becoming a homeowner by availing of a home loan but are unaware of how you can enjoy considerable home loan tax benefits while repaying your loan EMI. Regarding home loans, as per the Income Tax Act, you can get an exemption on both interest and principal repayments.
Home loan EMI repayment is categorized into principal and interest constituents on a home loan. According to Section 80C, you can get a maximum tax deduction of Rs 1.50 lakh on the principal component, including 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. However, there are specific limits to getting principal and interest repayment exemptions.
To know the tax exemption figure on your home loan repayment, you must understand how it is computed. Here is where a home loan tax benefit calculator can help you. With a home loan tax saving calculator; you can calculate your tax benefits before applying for a home loan.
How does the tax benefit calculator work?
The online tax saving calculator needs your details like gross annual income, profile type, repaid principal amount, etc. Once you enter these details, you must click on the compute option, and the correct 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 a home loan. TTo fixes a reasonable budget for your repayments; you must accumulate all details about your expenditures and income earnings, including the tax benefit. 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
Bottom line
Besides estimating your tax savings, the home loan tax benefit calculator also permits you to prepare a prudent budget. However, if you are a new home loan seeker, you must choose the correct lender per your preference and eligibility before applying for a home loan. For this, you may use the home loan eligibility calculator available online.
