Home Loan Tax Benefits Calculator

What is a Home Loan Tax Benefit Calculator?

A Home Loan tax benefit calculator is designed to help borrowers estimate the tax savings against their Home Loan repayment. By integrating the key financial details like loan amount, tenure, interest rate and repayment schedule, the Home Loan and tax benefit calculator provides a clear breakdown of deductions under various sections like 80C, 24(b), and 80EE/80EEA of the Income Tax Act.

Home Loan Tax Benefit Calculator

A housing loan tax benefit calculator is a tax-planning tool that saves time, eliminates manual calculations, and simplifies financial management. It reflects how much of your EMIs contribute toward principal repayment and interest payment, which are eligible for tax deductions under multiple sections of the Income Tax Act.

How Home Loan Tax Benefit Calculators Work

Here’s how you can use the Home Loan tax benefit calculator:

1. Input Basic Details

- Enter the loan amount sanctioned.

- Provide tenure (in years) and applicable interest rate.

- Add your gross annual income for a more accurate computation of deductions.

2. Breakdown of Eligible Tax Savings

- The calculator identifies tax-deductible components, such as the interest paid (Section 24(b)) and principal repaid (Section 80C), based on user inputs.

- If you're a first-time buyer, you can include the additional limit under Section 80EE/80EEA.

3. Generate an Amortisation-Based Projection

- See how your tax benefits evolve across your loan tenure with an interest and principal split for each year of repayment.

4. Display Results Instantly

- The result showcases the maximum deductions you can claim for a financial year, enabling proactive tax-saving planning.

Major Home Loan Tax Benefits

1. Tax Deduction on Interest Payment (Section 24(b))

- Deduction of up to ₹ 2 Lakh per annum is allowed on interest paid for self-occupied properties.

- There’s no upper limit for the interest deduction for a non-self-occupied property.

- Pre-construction interest can also be claimed in five equal instalments after possession.

2. Deduction on Principal Repayment (Section 80C)

- Principal repayment is eligible for a tax deduction of up to ₹ 1.5 Lakh per annum.

- This applies to both self-occupied and rented properties.

- To claim this benefit, the property must not be sold within 5 years of purchase; otherwise, the deduction gets reversed.

3. First-Time Buyers Additional Deduction (Section 80EE/80EEA)

Section 80EE: Claim an additional deduction of up to ₹ 50,000 annually on Home Loan interest if:

a. The loan is not more than ₹ 35 Lakh.

b. The property value is under ₹ 50 Lakh.

4. Section 80EEA:

For affordable housing loans sanctioned between April 1, 2019, and March 31, 2022, first-time borrowers can avail of deductions up to ₹ 1.5 Lakh beyond Section 24(b).

5. Tax Relief on Second Homes

- If you own multiple properties, the notional rent exemption now allows two properties to be classified as self-occupied, removing the tax liability for deemed rental income.

- Interest payment deductions are also allowed under Section 24(b) for the second property.

6. Additional Benefits for Joint Home Loans

- In joint loans, each co-borrower can individually claim deductions under Section 24(b) (₹ 2 Lakh for interest) and Section 80C (₹ 1.5 Lakh for principal), provided they are both co-owners and contribute to the EMI payments."