5 Tax Benefits Of Taking NRI Housing Loans in India

As per the taxation policies in India, the NRIs get similar tax benefits just like the residents of India. All the tax benefits are identical for them associated with the interest and principal repayment aspects. For housing loans, it is essential for NRIs to have an income source which is taxable in India.

There are select legal acts under which it is provisioned for the NRIs to claim tax deductions

for housing loans such as Section 80EE, 80C and 24 under the Income Tax Act. In this article, you will get to know about some of the tax benefits for NRI housing loans in India.

Most Commendable tax benefits for NRI Housing Loan

Most of the banks and financial institutions in India are readily offering home loans for

NRIs. But as per the select criteria, the tenure of home loan repayment might vary, and

The interest rate is usually high for such loan candidates.

However, there are loads of tax benefits. These include:

1. Tax Deduction On Registration, Stamp Duty & Principal Repayment

Under the Section 80C of Income Tax Act, it is legal for the NRIs to claim tax deductions for

home loans. The tax deductions are meant to be claimed for principal repayment, property

purchase cost, stamp duty and registration charges.

In India, the maximum deductions that are possible for NRIs are up to INR.15,000,00.

However, the NRIs have to abide by the rules that they cannot sell the house or property

within the next five years.

2. Deduction on Repayment of Interest

Under section 24 of the Income Tax Act, an NRI can claim a tax deduction on the interest

repayments on EMI. There is a maximum limit of deduction that one can claim which is Rs.

200,000 per year. This plan is for a self-occupied house owned by NRI.

3. Additional Deductions for First-Time Buyers

If an NRI is seeking a loan to buy their first home; then they are liable to claim tax deduction

of Rs.50,000 on interest repayments every year. This benefit is under Section 80EE. The

condition is that the loan amount must be less than Rs. 35 lakhs, while the total property cost must be less than Rs. 50 lakhs.

4. Joint Home Loan Tax Benefits

In the case, where an NRI and his wife are willing to take a joint home loan, the wife can

also claim for tax deductions separately. In this case, when you take a joint loan, you

become the owner of the property while your wife or partner will be co-owner. Both can

individually claim the tax benefits under Section 80C of the Income Tax Act. The tax

deduction is permissible on the principal loan amount for a maximum of Rs. 150,000 each.

5. Additional Perks under Section 24

Section 24 also supports deduction claims for interest repayment on home loans for NRIs,

even when it is under the pre-construction phase.

These were few of the tax benefits for the NRIs who wish to seek a home loan for buying a

house or property in India. Reach out to the best banks or financial institutions such as SBM

Bank, they can help you out with the needful services and information.