The Income Tax filing season may not be here as yet however the last date to make investments for the financial year 2017-18 is nearing. This time is crucial as investments under Section 80C must be made before 31st March 2018. However, what if you’ve got a home loan and you are already paying a huge EMI that comprises of the Principal and Interest.
Well, if you are paying an EMI on Home Loan and feel that more investments to save tax would just make you struggle financially then you must look at your Home Loan Account Statement and figure out how much amount from your EMI goes towards Principal and how much towards Interest.
As per Income Tax rules, you can claim upto 1.5 Lakh completely under Section 80C from the EMI payment towards Principal deduction and the interest part can be claimed as exemption under Section 24. The maximum tax exemption for interest on a self-occupied property is 2 Lakh while there’s no limit if the property is not self-occupied.
However, to benefit from your Home Loan, your home should be fully constructed and you must have a completion certificate with you.