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
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.