Now avail tax benefits, using your Bank’s Home Loan Statement.

Gone are the days of waiting for your house to be issued it's Completion Certificate, before you can start availing the tax benefits on your Home Loan amount. With a new ruling from the Income Tax Appellate Bench, saving on taxes becomes easier for homebuyers. Let us break it down for you:

What type of tax exemptions can one avail on their Home Loan?

When a homeowner buys a property using a Home Loan, he can claim a few tax exemptions on the same. Under Section 24 of the Income Tax Act, for a self-occupied home, one can claim the deduction of the interest amount, up to Rs 2 lakh. However, for a second property that is let-out, there is no cap on the tax exemption that you can avail. The same Income Tax Act also lets the owner get an exemption, up to Rs 1.5 lakh, on the principal component under Section 80C.

How does one claim these benefits?

Previously, you needed a proof of the Completion Certificate issued to the builders by the authorities, to claim the benefits on your Home Loan EMI exemptions. This rule has changed by a recent order from the Income Tax Appellate Tribunal's Mumbai Bench.

Now a Bank Loan Statement, which contains the name of the housing society, serves as enough proof for a tax exemption.

What has changed for the homeowners with this new rule?

This means that the homeowner can get up to a total of Rs 3.5 lakh exemption on their Income Tax for the year, without having to wait for the society to issue the Completion Certificate. As long as the homeowners are in possession of the house for which they secured the loan, the homeowner is entitled to the tax benefits, simply by producing a statement from the bank, which acts as a proof of having secured a Home Loan.