The article talks about various tax benefits on home loans that every taxpayer should be aware. It talks about tax benefit on interest paid even if you missed an EMI. It informs about tax deduction available on processing fees paid by you. It also speaks of the reversal of tax benefit claimed on Principal repayment if you sell your house within 5 years. The article says that Loans from relatives and friends are eligible for a tax deduction if used as a home loan. It says that You may not qualify for a tax break even if you are just a co-borrower and you can claim pre-construction period interest for up to 5 years. The above mentioned six tax benefits are overlooked or misunderstood by taxpayers.
The article explains that you can still be eligible to claim a deduction on the interest part of the EMI for the entire year even if you have missed few EMIs during a financial year.
Charges related to loan qualify for a tax deduction as these charges are considered as interest. Therefore, the processing fee is eligible for deduction under section 24 against income from house property.
You will be debarred from tax deduction claimed under section 80C on principal repayment of housing loan in case you sell a house within five years of purchasing it.
The article further elaborates on tax incentives stating that deductions can also be claimed for money borrowed from individuals for reconstruction and repairs of property.
Source : Economic Times