When you opt for housing loan, then you can become a benefactor of benevolent schemes under Income Tax Act. In fact, you can enjoy deductions from both interest and principal payments. While for principal the deduction claimed can be up to 100,000 INR in case of both rented and self-occupied property, under section 80C. For interest payment, under section 24(b), the deduction claim can be up to 150,000 INR in case of self occupied property.
You may even be able to enjoy deductions more than what are stated. However, if you are a higher earning member, then it must be a point that you should pay higher portion of EMI corresponding to home loan. The reason is that the tax benefit will directly depend upon the amount you pay towards loan repayment. If your spouse is also earning and the income is taxable, then it becomes important to include him/her in your plan of buying house as a co-owner.
Here the catch is that if your spouse is a co-owner, then you will be adding to the tax savings and hence boosting the deduction eligibilities. Of course, if you have access to this facility, then here is no point to let go of this opportunity.
If not spouse, then you ma probably want to consider your relative for joint-home loan. This will maximize the deductions and minimize tax liabilities. Hence, it is much clear here that this scheme is far more rewarding and ensures handsome returns than any other means. Rather than looking for deductions from any insurance policy, it is better as well as advisable to get maximum benefits from home loan than any other means. Of course, it is not a compulsion, but a great tax deduction for those who were long planning for a home of their own.