Planning to Get a New House? Know How Women Can Avail These Tax Benefits!

Women constituted 29% of home loan borrowers in India as of December 2019. Even though the number is low, an increasing number of financially-independent women are opting for such loans to realise their dream of being property owners. 

Consequently, the Government of India has also introduced several initiatives and programmes to encourage more women to invest in a property of their own. Financial institutions also provide several benefits to women such as concession in interest rates, quick approval, and low processing charges on a home loan. 

In addition to that, women can also claim home loan tax benefits under the following sections of the Income Tax Act which will enable them to save a significant amount annually – 

• Section 24(b)

Under this section, one can avail tax exemptions on the interest paid for a home loan. In case of self–occupied house, the maximum deduction that can be claimed is capped at Rs.2 lakh. 

For rented property, no upper limit has been specified; therefore, borrowers can claim tax deduction on the total interest component. 

However, if the property owner resides at a different location due to his/her business or job, the maximum deduction limit will be Rs.2 lakh. 

Borrowers should also keep in mind that they cannot claim tax deductions on interest paid for under-construction properties. Nevertheless, if they have availed home loan, they can claim deduction on the whole interest amount in five installments for five consecutive years from the year after which construction is completed.

• Section 80C

Women borrowers can also claim home loan tax benefit on the principal component of a home loan under this section. The maximum amount for which deduction is allowed is Rs.1.5 lakh. 

Along with the principal component, deduction for stamp duty and registration fee can also be filed under this section for the same year. 

Home loan applicants should keep in mind that they can only claim deductions under this section if construction/purchase is complete within five years of taking the loan. 

Also, to claim the tax deductions, the property cannot be sold or transferred for at least five years. 

• Section 80EEA

Under this section, additional home loan tax benefits on interest can also be claimed by women borrowers. This can be claimed over and above the exemptions of Section 24(b). 

Nevertheless, this deduction can only be claimed if certain conditions are met. These are – 

1. The stamp value of the property should be Rs.45 lakhs or less. 
2. The loan should have been sanctioned in FY 2019 – 2020.

If you are planning to apply for a loan with another individual, you should know the tax benefits on a joint home loan. 

When applying, women borrowers can use a home loan tax benefit calculator to easily calculate how much tax they can save. The calculator considers several parameters which include total income details, deductions under Section 16, housing details etc. to calculate the result. 

Eligibility Criteria 

Financial institutions offer easy to meet Bajaj Finserv home loan criteria to women. It is done to encourage more female borrowers to invest in a house of their own. They should also know about the factors that can affect home loan eligibility. 

The eligibility requirements are as follows – 

• Applicants should be residing citizen of India.
• They should have a steady source of income.
• Salaried applicants – 

1. Should have a work experience of 3 years.
2. Must be within the age of 23 – 62 years.

• Self-employed applicants – 

1. Should be of 25 – 70 years of age.
2. Must have a business operating for 5 years.

Before applying, women borrowers can use a home loan EMI calculator to check the monthly installments they have to pay towards their credit repayment. It will enable them to compare lenders and opt for a loan at competitive interest rates.