How is home loan tax benefit calculated?

A home loan tax saving calculator works by comparing tax liability with and without home loan deductions. It requires inputs like:

• Annual income
• Existing deductions under section 80C
• Home loan principal amount
• Loan tenure
• Current interest rate

Based on these, the calculator estimates potential tax savings from the home loan by considering deductions on:

• Principal repaid under 80C up to ₹1.5 lakhs

The calculator provides three key outputs:

1. Tax savings due to home loan deductions

2. Tax liability before availing home loan

3. Reduced tax liability after home loan deductions

Therefore, the home loan tax calculator gives clear insights into potential tax benefits, enabling an informed decision.