Home loan

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The Reserve Bank of India has directed that homebuyers can avail up to 90% of the property value in case this value is less than or equal to ₹30,00,000 towards home loan. For home loans between ₹30,00,000 - 75,00,000, the LTV (loan-to-value) ratio stands at 80% while it is 75% for loans above ₹75,00,000.

Home loan amortization is the process of reducing your home loan debt with regular payments over the loan period. A home loan amortization schedule is a table with details of periodic interest and principal repayments of the home loan along with the amount outstanding after each payment. It shows the gradual decrease of the loan balance until it reaches zero.

The tax benefit on home loan can be availed as under:

  • Under Section 80C a maximum annual deduction of ₹1,50,000 is allowed as tax exemption on repayment of the home loan principal.
  • Under Section 24 of the Income Tax Act, you can avail a tax benefit on the amount of interest paid on a home loan to the maximum limit of ₹2,00,000 for a self-occupied property.
  • Under Section 80EE of the Income Tax Act, first time home buyers can claim income tax deductions on their home loan interest towards the home purchase. Section 80EE allows deductions for the interest paid on a home loan for up to a maximum of ₹50,000 in every financial year. The borrower can continue to claim the deduction until they have repaid the entire loan.
  • In case of joint home loans, each of the co-borrowers is eligible to receive a total of ₹3,50,000 (₹1,50,000 under Section 80C + ₹2,00,000 under Section 24) as tax exemption. Thus, you and your spouse can claim a total tax exemption of ₹7,00,000 on your home loan.

Yes, you can avail all the government benefits similar to buying the property on your own.