Understanding the NRI tax rules in India is definitely a complicated task to deal with. The tax rules for the non-residents are slightly different from the permanent citizens of India. On that series only, here we are going to highlight the five tax benefits for the NRIs that they will get while taking home loans in India. Non-Resident Indians get similar tax benefits like Resident Indians with subject to repayment of principal and interest component of home loans availed in India.
NRIs can be benefitted from the tax deductions only if they have some income that is taxable in India. In case they have taxable income in India, they can claim deductions on the repayment of interest and principal component from the taxable income as per Section 24, 80C and 80EE of the Income Tax Act.
Tax Benefits Available to NRIs for Home Loans Availed in India
Below are 5 tax benefits related to NRI home loans availed in India:
- As per Section 80C, the deduction is available with regard to the repayment of the principal component of home loans. The maximum deductions available as per Section 80C could be 150000 p.a.
- As per Section 24, the deduction is available for the repayment of interest on home loans up to 200,000 p.a. This deduction is available under the head ‘Income from house property’.
- For NRIs availing home loans in order to buy their first home, an additional deduction of up to 50,000 p.a. is available (subject to the fulfilment of certain conditions) with regard to repayment of interest on home loans as per Section 80EE.
- As per Section 80C, NRIs can also avail deductions for registration charges and stamp duty paid for acquiring their property.
- Section 24 also allows deduction pertaining to repayment of interest on NRI home loans, even though the property is in pre-construction phase.
So, these are the three main benefits for the NRI taxpayers that they will get if they will apply for home loan in India. Consulting a trustworthy NRI tax service company would always solve the hassles.