Hi, I am planning to take home loan and have some doubts.
We get two kinds of tax benefits on home loan. One is on the principle amount we pay, this comes under section 80 C (maximum limit is 1 Lakh) and other one is on the interest we pay on principle amount, this amount is as it is deducted from our salary while counting our taxable salary, right?
So should I opt for EMI of 8333/- Rs. as it becomes 1 Lakh per annum and only this much is eligible under 80 C for tax benefits???
Currently HDFC reduced the floating interest rate (10.5 %). Is it better to opt for floating option from HDFC???
(1) Calculate your amortization schedule to figure out your interest component and principal component per year. (2) Interest upto 1.5 lacs is exempt from income tax per year. (3) The principal repayment is exempt upto 1 lac is exempt under 80 C along with other investments that you may have.