Home Loan

There is no bar in section 24 of the Income Tax Act regarding the number of loans on which interest is allowable simultaneously. In fact ,the simple rule of the deduction of interest u/s 24 of the Income Tax Act is that whatever be the interest paid or due on loan borrowed for purchase or construction of house is allowable as deduction. So, whether you take loan from one bank or five banks , all loan should be utilised for buying or constructing the house for allowance o.. Full Article

Tax benefits of Home Loan- Overall there are two types of tax benefits that are available on the repayment of a housing loan. Interest paid on the loan is eligible for a deduction up to Rs. 1.5 lakh per annum from the taxable income of the individual under Sec 24 when the property is self-occupied or it is one ownership property lying vacant. The return of the capital of the loan along with the interest up to Rs. 1 lakh is included in the benefit under Sec 80C. Full Article

Section 80C replaced the existing Section 88 with more or less the same investment mix available in Section 88. The new section 80C has become effective w.e.f. 1st April, 2006. Even the section 80CCC on pension scheme contributions was merged with the above 80C. However, this new section has allowed a major change in the method of providing the tax benefit. Section 80C of the Income Tax Act allows certain investments and expenditure to be tax-exempt. Full Article

The Union Cabinet today approved the proposal under 1% interest subvention on housing loan scheme liberalising the limit of housing loan upto Rs. 15 lakh where cost of the house does not exceeding Rs. 25 lakh from the present limit of Rs. 10 lakh and Rs. 20 lakh respectively, and designating National Housing Bank (NHB) as the Nodal Agency (NA) for implementing the scheme both for Scheduled Commercial Banks and Housing Finance Companies. Full Article

The essential conditions for availing higher deduction of interest of Rs.1,50,000/- in respect of a self-occupied residential house are that the amount of capital must have been borrowed on or after 01.4.1999 and the acquisition or construction of residential house must have been completed within three years from the end of the financial year in which capital was borrowed. There is no stipulation regarding the date of commencement of construction. Full Article

First Equated monthly instalment (EMI) amount is to be divided into the principal and interest components. The repayment of principal amount of the loan can be claimed as a deduction under section 80C up to a maximum amount of Rs.1 lakh. The repayment of the interest portion of the EMI is also allowed as a deduction under section 24 under the head “income from house property” upto Rs.1,50,000/- for self occupied property and full amount in case of let-out property. Full Article

The levy of a penalty by banks and housing finance companies for foreclosure of home loans does not amount to abuse of dominant position, the Competition Commission of India (CCI) ruled on Tuesday, quashing borrowers’ hopes that the practice could be Full Article

Plan your Home Loan Payment Schedule to take maximum tax benefit. Partial or full prepayment makes sense, but only in some cases. When Jabalpur resident Mahavir Ojha received Rs 80 lakhs from selling an ancestral property, he decided to part-pay his Full Article