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Issue ID : 117742
- 0 -

Maximum additional tax "saving" with home loan

Date 31 Dec 2021
Replies0 Answers
Views 485 Views
Asked By

I want to confirm my following understanding:

Context:

  • Person is a private sector employee, so it means he gets HRA.
  • Person falls in 30% tax bracket
  • Person takes a home loan of 29 lakh and value of the property is 40 lakh
  • Person will not live in that property, he will either rent it or his parents will live
  • Person is already utilizing his 80C exemption This is means person can only apply for a maximum of 2.5 lakh of exemption

Questions:

  • With the above-stated conditions, am I correct that the maximum exemption he can apply for is 2.5L?
  • Considering the 30% bracket and availing an additional 2.5L exemption against the home loan, am I correct that the maximum additional saving for him will be 75,000?
  • Does it matter whether the person lives in that home or rent it out? Does it impact tax calculation?
  • Any other key consideration I am missing related to tax calculations?

If any tax expert could help clarify/confirm my understanding, it will be greatly appreciated.

Warm Regards

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