Article explains three Deduction Claimed on the payment of principal and Interest amount of Housing Loan which are deduction under Section 24b for Interest on Home Loan, deduction under Section 80EEA which provides deduction on Interest on house loan over and above the eligibility mentioned in the section 24 and deduction under Section 80C for Repayment of Principal Amount of housing loan.

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Section 24b : Deduction on Interest on Home Loan

Maximum eligibility
  • Can claim a deduction of amount upto Rs.2,00,000/- on the home lan interest.
  • Deduction on interest is limited to Rs.30,000, if assesse fails to meet the condition as mentioned below.
Condition
  • The loan must be taken for purchase and construction of property
  • The loan must be taken after 01/04/1999
  • The purchase or construction must be completed within 5years from the end of the financial year in which the loan was taken.
Additional Information
  • As the law is silent so it is deemed that loan can be taken either from financial institution or family or friends.
  • Provided to claim the deduction of Rs.2,00,000/-, it is mandatory to furnish certificate from the person to whom interest is payable.

Section 80EEA : Additional Housing loan Interest deduction

Maximum Eligibility Rs.150000/- shall be allowed as a deduction on Interest on house loan over and above the eligibility mentioned in the section 24.
Assessee Applicable to individual either Resident or Non resident
Effective from : 01/04/2021
Conditions
  • Loan has been sanctioned by the financial instuitions between the period of 01/04/2019 to 31/03/2020 (2020 substuited to 2021)
  • Stamp duty Value ≥ Rs 45 lakhs
  • The assesse does not own any residential house property at the time of sanction of loan.
  • The assesse is not eligible to claim deduction under section 80

Section 80C : Deduction on Repayment of Principal Amount of Housing Loan

The Principal portion of the EMI paid for the year is allowed as deduction under Section 80C. The maximum amount that can be claimed is up to Rs.1,50,000/- But to claim this deduction, the house property should not be sold within 5 years of possession. Otherwise, the deduction claimed earlier will be added back to your income in the year of sale.

Besides claiming the deduction for principal repayment, a deduction for stamp duty and registration charges can also be claimed u/s 80C but within the overall limit of Rs. 1,50,000/-. However, it can be claimed only in the year in which these expenses are incurred.

 

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Qualification: Student - CA/CS/CMA
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Location: AHMEDABAD, Gujarat, IN
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