Unlike other loans where lenders charge prepayment penalties on payment made towards home loan, there are no prepayment penalties on floating rate home loans. In case of second house, you are eligible to claim deduction for the entire amount of housing loan interest paid under Section 24B of Income Tax Act. Read: to know more about home loan deductions. You can’t claim the income tax deductions while the property is under construction. The deductions under income tax are only available after the construction of the house is complete. While a deduction of up to Rs 2 lakh is allowed on the interest portion under Section 24B of Income Tax of India Act. An individual is eligible to claim a deduction of up to Rs 1.5 lakh under Section 80C of Income Tax of India 1971 Act in a financial year. Tax benefits To encourage more and more people to buy their own house, the government of India provides tax deduction on the principal as well as interest paid on a home loan.
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