Documentation And Procedure For Claiming The Home Loan Tax Benefit

A home loan is the ideal financial option that helps fulfil one’s dreams of owning a house and saves the cost of borrowing by offering a home loan tax benefit. Borrowers who have opted for a home loan are entitled to claim tax rebates under section 24, section 80C and section 80 EE.

Demand for home loans can be attributed to the availability of the lowest home loan interest rate and home loan tax benefits. Therefore, borrowers must take note of tax rules and regulations, including documentation and the procedure to claim it.

 Documents required for home loan tax benefits

Borrowers must submit the following documents necessary for home loan tax benefits to reap the advantages. The documents required are:

1. Ownership details of the property
2. Loan document certificate ( shows the break-up of the principal amount and interest levied on the sanctioned amount)
3. Construction completion certificate or documents stating the date of purchase
4. Borrowers must mention the tax deductions under section 24 (B) and section 80 (C) where they made contributions under EPF, PPF, LIC premiums, and associated EMI payouts towards their home loans.
5. Furthermore, borrowers must submit documents of deduction for interest received under section 80 TTA and 80 G.
6. Applicants must provide documents showing proof of the municipal tax payments.

Furthermore, borrowers must provide these documents to their employer to adjust their TDS (Tax deducted at source) to claim a tax rebate.

Procedure for claiming home loan tax benefits

Borrowers can apply for a housing loan and claim tax benefits in a hassle-free manner. Individuals can claim a tax deduction by following the simple steps mentioned below:

Step 1: Firstly, borrowers must calculate the tax deduction amount they want to claim for reduction.

Step 2: Borrowers need to check whether the property is registered in their names. In the case of a joint home loan, they must ensure that they are co-borrowers.

Step 3: Obtain a home loan interest certificate from the lending institution and submit it to the employer to adjust the TDS.

It is important to note that self-employed individuals are not required to submit these documents to anyone.To conclude, home loan tax benefit acts as a form of relief for property buyers. Indian Government extends home loan tax benefits to encourage citizens to buy property by making their borrowing affordable.