A person who belongs to service class is always terrorized by the by the income tax that he has to pay, as quite a huge part of what he earns, he has to pay it is a income tax and which is mandatory. So, people are always looking for ways in which they can minimize the amount they require to pay as income tax.
People who are planning to borrow a home loan may also be worried about would they be able to cope up with both income tax as well as home loan that they are planning to borrow. So, here is good news for such people. A person who has borrowed home loans is entitled to avail tax benefits on the interest paid up to Rs. 1, 50,000 for a financial year.
If a home loan is jointly borrowed then both the borrowers are entitled to avail separate tax benefits, resulting in an increase in the amount of tax deductions but the deductions can be availed only when the payment was made, if a borrower was unable to make payment then he can not avail tax benefits on the same.
In case the home loan was borrowed jointly then the tax benefits are to be shared in the same proportion as they share the in home loan. The tax benefits are still applicable if the borrower refinances his loan for the first time but if the borrower wants to borrow another loan to repay his loan for the third time then he is not eligible to enjoy tax benefits.
In order to claim the tax benefits the borrower requires to present the certificate clearly showing split between the principal and the interest rate in the EMIs paid during the year issued by the housing loan company.
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