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Investment Declaration Guide For Home Loan Buyers

July 31, 2023
Investment Declaration Guide For Home Loan Buyers

Taking up a home loan is one of the greatest milestones in your life. If you're planning to buy your dream home, you should be aware of the many tax benefits available. Properly utilizing these tax benefits can help reduce the financial burden of home buying and make it a more affordable investment in the long run. Investment declaration is an essential process for home loan buyers as it helps them to avail tax benefits available under the Income Tax Act, 1961. Here, we will discuss how much investment is needed to save tax and other details about Form 12BB. Moreover, whether or not you need a declaration of investments before applying for a home loan is a question that many have.

In this article, we'll guide you through the investment declaration process and show you how to avail of tax benefits on your home loan. So, gear up and get ready to make the most of the tax benefits available to you!

What Is An Investment Declaration?

When you take out a home loan to buy a house, you not only have to repay the loan but also have to deal with taxes on the property. However, the Indian government provides several tax benefits to home loan buyers to make the process of buying a house more affordable.

Investment declaration is the key to unlocking these benefits and making the process of buying a house more affordable. By declaring your investments and expenses, you can reduce your taxable income and claim deductions on your home loan. To answer how much investment is needed to save tax, you must have at least 20% of your annual income allocated to ELSS, Child Plans, ULIPs, etc., that is, options that offer EEE benefits. However, there are other terms and conditions that you must be aware of before making any decision.

Tax Benefits That You Can Avail Of

Under the Income Tax Act, home loan buyers can enjoy several tax benefits, including deductions for both interest payments and principal repayment. Section 80C offers a deduction of up to Rs. 1.5 lakh on principal repayment, while Section 24 provides up to Rs. 2 lakh on interest payment. Homebuyers can also claim tax benefits on joint home loans and for the construction of a new property. Additionally, Section 80EEA offers an additional Rs. 1.5 lakh deduction on interest payments for first-time homebuyers. It's important to keep track of these deductions by submitting an investment declaration form to your employer.

What Is Form 12BB?

An investment declaration is a formal declaration made by an individual to their employer or relevant authorities about their investments and expenses. It is an important document that helps individuals to avail of tax benefits and deductions available under the Income Tax Act, 1961.

Income tax declaration for salaried employees is an integral part of the investment declaration process. The investment declaration form, also known as Form 12BB (Income Tax), standardizes this process and requires employees to declare their investments, expenses, and deductions.

To avail of tax deductions, taxpayers need to ascertain the required amount of investment. The investment declaration form enables the declaration of investments made under different tax-saving schemes like the Public Provident Fund (PPF), National Pension System (NPS), Life Insurance Premium, and other deductions under Sections 80C, 80CCC, and 80CCD.

Housing loan investment declaration and Form 12BB (Income Tax) go hand-in-hand for home loan buyers. By filling out the investment declaration form accurately, home loan buyers can claim tax benefits on their home loan. They can declare the interest paid on the loan, the principal repayment amount, and any other relevant expenses or deductions related to the loan. Investment declaration home loan interest deductions can be availed of only after the Form 12BB is filled accurately.

When Is The Last Date To File For Investment Declaration?

The last date to file for investment declaration may vary depending on the policies and procedures of the organization. Typically, employers ask their employees to submit their investment declaration at the beginning of the financial year, usually in April or May. However, some organizations may have different timelines for submitting investment declarations.

It is important to note that an investment declaration is a preliminary step toward tax planning, and it is not the same as filing income tax returns. The deadline for filing income tax returns is generally July 31st of the assessment year. Therefore, it is advisable to submit an investment declaration well before the deadline to avoid any last-minute hassles or discrepancies.


If you’re reading up about investment declaration, home loan interest rates and amounts might interest you. In conclusion, home loan buyers should make an accurate and timely investment declaration to claim tax benefits available under the Income Tax Act, 1961. If you're in the market for a home loan, SMFG Grishakti is the ideal choice. Our online home loan EMI calculator allows you to determine the loan amount and repayment terms that best meet your needs.

Check out the necessary documentation required for a home loan today and take the first step toward owning your dream home. Our 100% online application services are designed to provide a seamless and hassle-free experience, ensuring that you get the best possible deal.

Disclaimer: *Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG Grihashakti. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG Grihashakti’s policy at the time of loan application. If you wish to know more about our products and services, please contact us.

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