Home Loan: Let’s take a look at the details of home loan, how it can reduce the tax rate.
The right method
Almost everyone knows about home loan. Many people also know something about home loan interest rates and its tax savings potential. But many people do not know how to get a good home loan at low interest rate by setting a loan amount, loan repayment deadline. There are also various aspects of tax savings in the case of home loans. As a result, it is important to know the proper procedure for taking a home loan. The greatest benefit can be obtained from a home loan when a smart approach is adopted.
Tax savings
In case of home loan, according to section 80C of 1971, it is possible to save tax of around Tk 1.5 lakh per year. But there are other ways to save on home loan tax. These include investments in public provident funds, equity linked savings schemes, investments in ULIPs, tax savings on school salaries, life insurance premiums, etc.
Alternatives to tax savings
There is no alternative to tax savings on home loan interest as per section 24B. In this case, the lower the interest rate, the lower the tax savings. According to section 24B, the total amount is about 2 lakh rupees.
Amount of home loan
If one takes a home loan of around Tk 3 million for 15 years at an annual interest rate of 8%, he can make a total tax savings of around Tk 5.54 lakh in 15 years. On the other hand, if one takes a home loan of around Rs 50 lakh for 15 years at an annual interest rate of 6 per cent, he can make a total tax savings of around Rs 13.93 lakh in 15 years.
More interest in the long run
When you run a home loan for a long time, the amount of interest is much higher. In that case, instead of paying interest of Tk 18.53 lakh on a home loan of Tk 30 lakh, a total interest of around Tk 52.59 lakh will have to be paid on a loan of Tk 50 lakh. As time goes on, the amount of interest on home loan will increase.
More interest on more loans
If the amount of home loan is higher then the amount of interest is also higher. If the time continues to increase then the amount of interest is more.