CA Sandeep Kanoi

Government has raised Home/ Housing Interest Exemption amount under section 24 from Rs. 1.50 Lakh to Rs. 2 Lakh WEF Assessment Year 2015-16 in respect of Loan Taken for Purchase of Self Occupied House Property.

Deduction from income from house property

The existing provisions contained in section 24 of the Act provide that income chargeable under the head “Income from house property” shall be computed after making certain deductions. Clause (b) of the said section provides that where the property is acquired with borrowed capital, the amount of any interest payable on such capital shall be allowed as deduction in computing the income from house property. The second proviso to clause (b) of the said section, inter-alia, provides that in case of self-occupied property where the acquisition or construction of the property is completed within three years from the end of the financial year in which the capital is borrowed, the amount of deduction under that clause shall not exceed one lakh fifty thousand rupees.

There has been appreciation in the value of house property and accordingly cost of finance has also gone up.

Therefore, it is proposed to amend the second proviso to clause (b) of said section 24, so as to increase the limit of deduction on account of interest in respect of property referred to in sub-section (2) of section 23 to two lakh rupees.

These amendments will take effect from 1st April, 2015 and will, accordingly, apply in relation to the assessment year 2015-16 and subsequent assessment years in other words the same will apply in relation to Financial Year 2014-15 and subsequent Financial Years.

Related Provision in Finance Act, 2014

Amendment of section 24.

10. In section 24 of the Income-tax Act, in clause (b), in the second proviso, for the words “one lakh fifty thousand rupees”, the words “two lakh rupees” shall be substituted with effect from the 1st day of April, 2015.

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0 responses to “Home Loan Interest Exemption Limit increased to Rs. 2 Lakh”

  1. JOHN SELVAKUMAR says:

    H.L. Interest paid Rs. 426568- by Husband & Wife during FY 201-16.
    How much amount claimed for exemption for each member

  2. JOHN SELVAKUMAR says:

    Housing Loan Interest Paid during 2015-16 Rs. 425688- by Husband and Wife.
    How much amount deducted for exemption each member

  3. MILAN GOHIL says:

    Dear Sir,

    I had taken a two housing loans for the two house which is owned by me for the FY 14-15
    Now, Can i take a deduction for the interest paid for both of the loan taken combindly.

    Reply me.

  4. amit says:

    I have taken loan of 18 lakh and house cost was 45 lakh. I am giving 182511 EMI per year. Pl confirm am i eligible for tax exemption for this housing loan…..under section U/s 24

  5. PAnkaj Goswami says:

    I have taken a loan of Rs 23.90 Lakh for my house. The new house is purchased jointly with my wife as 1st owner. can we both me and wife claim get exemption of interest amount 2 lakh individually?
    How can take benefit of principal and interest u/s 24B abd 80 EE ?
    – See more at: https://taxguru.in/income-tax/budget-2014-home-loan-interest-exemption-limit-sop-increased-rs-2-lakh.html#sthash.aAOhZ1Bc.dpuf

  6. Vanita Tiwari says:

    Yes the tax rebate can be taken on Rs. 2 lac

  7. J P Pandey says:

    Dear Sir,
    I took home loan in Oct,2010 and I expect to get possession of my house in March 2015. Last installment was paid in May,2014.
    Can I claim tax rebate in 2014-15 after considering that the property is constructed in 5 year period and not in 3 year.
    As last installment was paid in may-2014 and possession in March-2015, can it be considered that the property is constructed with in 3 years of capital borrowed.
    Which financial year(2010-11 or 2014-15) is considered for “capital borrowed” year as mentioned in Section 24.
    Please clarify.

    J P pandey

  8. yaswant says:

    Sir,

    I have a house but i am living for rent in another area. I have given my house for rent, is the limit of Rs.2 Lakh applicable for me or cai i claim the total interest that i have paid

  9. S Sudarshana says:

    Mr DKMohan, Information is not adequate. Important factor is ownership of the property. If it is owned by both and the repayment is by both, theb both can claim by any ratio (can be varied from year to year depending upon the maximum benefit you want to derive) both for principal and interest. 9880037215

  10. D KMOHAN says:

    MY SON. SON INLAW. AND DAUGHTER TOOK HOME LOAN FROM HDFC IN DEC 2014
    AND THE REPAYMENT IS MADE BY MY SON. AND SON INLAW CAN THEY CLAIM PRINCIPAL AND INTEREST DEDUCTION BY DIVIDING THE AMOUNT EQUALY

  11. Hari Om says:

    Dear Sir,
    I took home loan in Nov,2008 and I got possession of my flat in June 2014,with last installment was paid in may,2014.
    Can I claim tax rebate in 2014-15 after considering that the property is constructed in 5 year period and not in 3 year.
    As last installment was paid in may-2014 and possession in June-2014, can it be considered that the property is constructed with in 3 years of capital borrowed.
    Which financial year(2008-09 or 2014-15) is considered for “capital borrowed” year as mentioned in Section 24.
    Please clarify.
    Hari

  12. S Sudarshana says:

    Dear Vijaykumar and D Suresh: get the property registered in your name and claim the benefits including the EMIs paid till registration as per rules.

  13. Vijay Kumar says:

    I have taken housing loan to construct a house through a society in he year 2011.EMI started in year 2011 itself.
    I received possesion of flat in Nov.2014 but flat is not yet registered on members name… Pl confirm am i eligible for tax exemption for this housing loan…..under section 80 C & 24 c

  14. D Suresh says:

    Dear Sir,
    I have taken housing loan to construct a house through a society.. Now EMI is supposed to start but houses are not yet registered on members name… So am i eligible for tax exemption for this housing loan…..

  15. Ajitha Sudhanathan says:

    What is the exemption of housing loan interest for the second house. Possession not yet received. But installment of housing loan started .

  16. Niel_N says:

    I have taken a loan of Rs 25.25 Lakh for my second house. The new house is purchased jointly with my wife as 1st owner, where as I have a earlier house in my name alone. Presently the new house is complete. Loan sanctioned in and disbursed in Feb’14.

    How can take benefit of principal and interest u/s 24B abd 80 EE ?

  17. Hari Vinod says:

    From when the amendments related to exemption towards Housing Loan interest from 1.5 lakh to 2.00 lakh is getting applicable?

  18. Filbert Minj says:

    Hi,

    I have taken a home loan to buy a under construction flat. The loan has been sanctioned on 31 Mar 2011. The first installment of loan is disbursed on 10 June 2011. The project is completed in June 2014. Will I be eligible to claim tax rebate of 2 lac on interest paid towards the repayment of home loan.

    Thanks

  19. s sudarshana says:

    If is is for next financial year, what was the need for FM to announce it now? Your explanation that it is effective from next year 1st April will be a dampner for many.
    I wish FM will correct it to be effective from this financial year, i.e. 1/4/2014 during the budget speech/discussion.

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