Do home loans offer any tax benefits?
Yes. So far, both the principal repayment and the interest offer a tax benefit. As per the Income Tax Act, 1961, you can avail an exemption of up to Rs 1 lakh under section 80C for repayment of principal on home loans and exemption of up to Rs 1.5 lakh on interest paid on the loan. These figures are as per the assessment year 2009-10. The benefits vary every year as per the provisions of Income Tax Act. In fact, there has been a proposal to do away with some of the tax benefits pertaining to home loans. So, please consult your tax consultant for a detailed advice.
