First time home buyers to get additional deduction of Rs 50,000 on interest for loan upto Rs 35 lakh:Budget 2016

By introducing an additional deduction of Rs 50,000 in the Budget 2016 proposal, Finance Minister Arun Jaitley has given some reason to cheer to the first time home buyers. This additional deduction has been given on interest for loan up to Rs 35 lakh, provided the house value doesn't exceed Rs 50 lakh. A home buyer in India is entitled to claim both the interest and principal components of home loan repayments for tax benefits. Currently interest payable on a 'self-occupied' house is subject to a maximum deduction of Rs 2 lakh under the head 'Income from House Property'. Besides interest, the portion of one's EMI which goes towards principal repayment is allowed to be claimed under Section 80C. This amount can be claimed within the overall limit of Rs 1,50,000 under Section 80C.

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