Thursday, March 31, 2011

Tax savings through home loan prepayment

Salary class has always been the section that has to bear the ruthless burden either it is the rising food prices or the soaring lending rates and even after all this a large portion of salary is due with the taxation department.

There is not a lot that a working professional can do about it but even he can try to save as much as he can to be paid as Tax. If an individual has borrowed home loan and if he intends to prepay the principle home loan amount then such an individual can claim for Tax deductions of up to 1 Lakh under section 80C.

GES in Deloitte India Mr. Rajesh Srinivasan said "If an individual transfers the property before the expiry of five years from the end of the year in which he gets possession or receives the amount paid, then the deductions allowed earlier will be treated as income in the year of transfer or receipt."


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