Investing in real estate, particularly owning a house, is a significant achievement for many individuals. Apart from providing shelter, it also serves as an asset that can yield financial benefits. In India, There are various provisions available for taxpayers to avail deductions and exemptions in Income Tax Act, 1961 and one such provision is Section 24, which deals with the deduction of interest on house property. Let's understand in detail about Income from House Property and Section 24 and understand how it benefits taxpayers.
Under the Income Tax Act, 1961 in India, income from house property is taxed under the head "Income from House Property". Here are the types of income considered under this head
Section 24 deals with the deduction of interest paid on Home Loan taken for the House Property that is either self-occupied, let out or deemed let out. It allows deduction in case of Loan taken for construction, acquisition, repair, renewal or reconstruction of property.
This is very common practice in India that House Property is generally Co-Owned and also Home Loan taken is Joint. Deduction of Interest in this case will be allowed in the same proportion as Ownership of House Property. For Tax Saving purpose also, it is beneficial to take Joint Loan as both parties can take deduction up to 2 lakh in their Income Tax Return.
For individuals who have taken housing loans, Section 24 offers significant tax benefits. By claiming deductions on the interest paid, taxpayers can reduce their taxable income, thereby lowering their overall tax liability. This incentivizes individuals to invest in real estate and promotes homeownership.
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