Declare Home Loan in Tax Declaration - A Guide

• Apart from providing financial assistance to buy your dream house, a home loan also offers tax benefits.
• It is crucial to declare your home loan in your tax declaration correctly to claim the applicable tax benefits.
• You should have the necessary documents to declare your home loan in your tax declaration. These include ownership papers, construction certification, loan approval, etc.

A home loan bridges the financial gap between a mere aspiration and the actual possession of a home. While purchasing your home is a significant milestone, it can get expensive. However, the good thing is that you can claim tax benefits on your borrowings if you declare your home loan in your tax declaration correctly.In this blog, we share a step-by-step guide on how you can make this declaration and unlock potential savings.

Home loan declaration is a straightforward process, and you can easily complete it by submitting the relevant details. Here’s what you normally will have to do:

• Step 1 : Collate all documents together, such as your house ownership papers, construction certification, home loan approval, interest and principal payment documents, and municipal tax receipts. Also, keep your identity proof handy.
• Step 2 : Submit all the relevant documents to your employer.
• Step 3 : Calculate the deduction amount you can claim on the home loan. You may explore using an online calculator or consult your chartered accountant.
• Step 4: Make sure accurate and complete details are mentioned in your income tax return.

To declare your home loan in your tax declaration, it is important to understand the deductions you can claim. You can claim the relevant deductions subject to the fulfilment of applicable conditions.Here is a tabulation of some key deductions along with the relevant sections for your reference:

* Subject to the fulfillment of applicable conditions.
Did the above table get you thinking about the tax benefits in the case of a joint loan? In case it did, read on as we list some of these benefits below:

• Each borrower can claim a deduction of up to ₹1.5 lakh on the amount of principal repayment under Section 80C .
• Each borrower can claim a deduction of up to ₹2 lakh for the interest payments under Section 24(b).

While the above doubles the deduction amount, both applicants should be the co-owners servicing EMIs. Also, you must note that these benefits can be claimed in proportion to your share in the property and must adhere to the individual limits set by tax laws.

It is crucial to declare your home loan in your tax declaration properly to fully enjoy the tax advantages it offers. Additionally, from savings through competitive interest rates to flexible repayment tenures, there are several other benefits that a home loan offers.To maximise these benefits, opt for customised loan solutions that best suit your needs. For more details, reach out to an Aditya Birla Capital representative today! Also Read: Home Loan Process - Step-by-Step Procedure to Get a Home Loan