According to the Act, Rs. 1.5 lakhs is the maximum permissible tax deduction for a financial year for the original home loan plus for any additional loans taken is. If one’s current deduction on an existing loan is less than Rs. 1.5 lakhs, then she/he can claim further benefits from an additional loan, but only till they reach the upper limit of Rs. 1.5 lakh in a financial year.

Also, the tax benefits under the sections 24 and 80C of the Income Tax Act hold under the sole condition that the payment has been made. If a person fails to pay even a single EMI, he is not only debarred to claim the tax benefits on them, but it becomes more difficult for him while borrowing money in the future.

The most important point to understand is that the tax rebate is applicable only to the person who has borrowed the home loan, i.e. under whose name the home loan has been borrowed. This has been specified in the Income Tax Act of India. However, apart from the purchase of home, the interest on any loan, taken for repairs, renewals or renovation of the house also qualifies for a tax deduction. Also, it is possible to get a joint tax deduction on a home loan. When the husband and wife are both taxpayers with independent income sources, they can get tax deductions on the same home loan if they both signatories for the home loan. In such a circumstance, there is a proportional distribution of the tax benefits, i.e., tax benefits are shared to the extent of the amount of loan taken in their individual names.

Hence, the Income Tax Act of India has made it easier for people to give tax rebates by investing in their own house. Hence, eliminating all their worries.