How Home Loan can save out tax ?

Question

We have to pay prinicpal amount and intrest amount in home loan so how its help to save tax.
for e.g I have a loan of 6 Lacs : Principal amount is :25000 / Yr and Intrest amout is : 35000/Yr. can i deduct 25000+35000=60000/yr from taxable income or only 35000(intrest amount)

Thanks,

I think You are talking according to US income tax law and i want to know according to Indian Income tax Law.

Thanks,

Answer 1

It is possible that you would be able to deduct all or some of your mortgage interest, but there are other things to consider.
First, you would ONLY EVER be able to deduct the interest. You cannot deduct the principal. Second, if you make over $145,950 (or half that for Married Filing Seperately), your deductions may be limited. There are also other things to consider, such as Mortgage Interest Credits, and Prepaid Interest. I have attached IRS publication 17, which should be helpful in the matter. Remember that you must file Schedule A in order to take the deduction at all, so you'll want to keep track of charitable contributions, medical expenses, and other deductions. These are outlined in the Pub 17 as well. Let me know if I can be of further assistance.

Answer 2

Get deduction u/s 80C for the principal amount of Rs.25000/-(subject to the limit of Rs.100,000)

Get deduction of Rs.35000/- (ineterst) u/s 24 . But this should be deducted from the head 'Income from House Property'

For more help contact me at [e-mail]

Answer 3

hi KK, you will desire to understand the certainty that, with proposed Direct Tax Code (from FY 2011) each and all the concessions available under section 80C would depart.So in case you're making an investment in homestead purely for the sake of saving tax, then you truthfully would be in worry going extra. There are different extra helpful the right thank you to maintain tax like insurance, ELSS, PPF etc. Regards, Pranav