Home loans help you own the home of your dreams. Additionally, the government lets the borrower claim tax subsidy on both the principal and interest amounts paid. Moreover, you can save extra if you opt for a joint home loan (with two or more borrowers). In the budget for the financial year 2017 – 2018, maximum interest exemption for tax benefit on home loans has been capped at Rupees 2 lakhs including that on the rented property. This basically means that each co-borrower in a joint home loan is eligible for a tax deduction of Rupees 2 lakh for the home loan interest paid by each of them. There are tax subsidies on principal repayments of the home loans too.
Additionally, with schemes like the Prime Minister Awas Yojna (PMAY), the central government is offering 3-4% interest subsidies on home loans from Rupees 9 lakh to Rupees 12 lakh to first-time borrowers. Moreover, since MCLR-linked loans have been launched, most of the banks are arranging to pass on any subsidies by the RBI to the customers. SBI, Axis, ICICI and HDFC banks along with Indiabulls Housing Finance have lowered their home loan interest rates. Thus, it can be said that 2017 is a high-time to take a home loan especially since many government benefits on loans may end by the end of the calendar year. Read on to know how to save more with a joint home loan: [Read more…]