BlogsHome loans
Tax on a home loan, only as far as the rules of the year allow.
Interest and principal have had tax treatment that changes with the regime and the year. This note does not estimate a saving. The sanction and the interest certificate belong with a chartered accountant.
A deduction is not a discount on the house
A home loan tax benefit exists only inside the law of the year in which the return is filed, and only inside the regime the taxpayer chooses. Under the older regime, interest on a self-occupied house and repayment of principal have both been capable of deduction, within limits set by the statute. The newer regime has not offered the same list. Those limits are amended from time to time. An article that states “you will save this many rupees” is guessing the income, the regime and the Finance Act of that year.
The proper use of the tax rule is as a question, not as a reduction in the price of the flat. If a deduction is available, it reduces tax. It does not pay the instalment. The instalment leaves the account every month whether or not the deduction is later allowed.
