Home loan entitles Individuals to Deduction Under Section 80C of up to Rs. 1.50 Lakh and Interest Deduction under section 24 of up to Rs. 2 Lakh. Articles deals with Faqs on Benefit U/s. 24 and 80C on Jointly Owned Property, Under Construction Property, multiple properties and Simultaneous benefit of Interest exemption and HRA.
Q-1 What are Income tax benefits of taking and repaying a housing loan under EMI Plan?
You will be eligible to claim both the interest and principal components of your repayment during the year.
- Interest can be claimed as a deduction under Section 24. You can claim up to Rs. 200,000 (Rs. 150000/- up to A.Y. 2014-15) or the actual interest repaid whichever is lower. (You can claim this interest only when you are in possession of the house)
- Principal can be claimed up to the maximum of Rs. 150,000 (Rs. 100000/- up to A.Y. 2014-15) under Section 80C. This is subject to the maximum level of Rs 150,000 (Rs. 100000/- up to A.Y. 2014-15) across all 80C investments.
- You will need to show the statement provided by the lender showing the repayment for the year as well as the interest & principal components of the same.
Q-2 If I buy a house jointly with my wife and take a joint home loan, Can we both claim income tax deduction?
Ans:-Yes, if your wife is working and has a separate source of income, both of you can claim separate deductions in your income tax returns.The repayment of principal amount of the loan can be claimed as a deduction under section 80C up to a maximum amount of Rs. 1.50 (Rs. 1 Lakh up to A.Y. 2014-15) lakh individually by each co-owner.
In cases where the house is owned by more than one person and is also self-occupied by each co-owner, each co-owner shall be entitled to the deduction individually on account of interest on borrowed money up to a maximum amount of Rs. 2 lakh (Rs. 1.50 Lakh up to A.Y. 2014-15). If the house is given on rent, there is no restriction on this amount. Both co-owners can claim deductions in the ratio of ownership.
Q-3 My husband and I have jointly taken a home loan. He pays 75 percent of the EMI. What will be our individual tax benefits?
Ans: – As you have taken a joint home loan, both of you are eligible for tax exemption for your share of the EMI paid. For claiming income tax deduction, the EMI amount is divided into the principal and interest components. The repayment of the principal amount of loan is claimed as a deduction under section 80C of the Income Tax Act up to a maximum amount of Rs. 1.50 (Rs. 1 Lakh up to A.Y. 2014-15) lakh individually by each co-owner. The repayment of the interest portion of the EMI is also allowed as a deduction under section 24 of the Act, which is given under the head “income from house property”. In case you are living in the house for which home loan is taken, both of you shall be entitled to deduction in the ratio (3:1) on account of interest on borrowed money up to a maximum of Rs. 2 lakh individually (Rs. 1.50 Lakh up to A.Y. 2014-15). If the house is given on rent, there is no restriction on this amount and both co-owners can claim deduction in the ratio of ownership- 3:1 in your case.
Q- 4 plan to buy a house by raising loans from friends and relatives. Will I be eligible for tax benefit from all sources?
Ans: – Interest payment to friends and relatives can be claimed u/s 24 but only against a certificate received from them. In the absence of the certificate, you would not be eligible for the deduction. The recipient of interest income who issues the certificate is liable to pay tax on the interest income that he receives. As far as the principal payments are concerned, they would not qualify for tax benefit as loans only from notified institutions and banks are eligible for such deductions.
Q- 5 What are the tax benefits that I can avail of for repaying a home loan ?
You will be eligible to claim both the interest and principal components of your repayment during the year.
- Interest can be claimed as a deduction under Section 24. You can claim up to Rs. 200,000 (Rs. 1.50 Lakh up to A.Y. 2014-15) or the actual interest repaid whichever is lower. (You can claim this interest only when you are in possession of the house).
- Principal can be claimed up to the maximum of Rs. 150,000 (Rs. 1 Lakh up to A.Y. 2014-15) under Section 80C. This is subject to the maximum level of Rs 150,000 (Rs. 1 Lakh up to A.Y. 2014-15) across all 80C investments.
- You will need to show the statement provided by the lender showing the repayment for the year as well as the interest & principal components of the same. Double Benefit on Taxes on Housing Loan
Q- 6 . Can I take advantage of tax benefits from a home loan as well as claim House Rent Allowance (HRA) ?
If you took a home loan and are still living in a rented place, you will be entitled to:
1. Tax benefit on principal repayment under Section 80C
2. Tax benefit on interest payment under Section 24
3. House Rent Allowance (HRA) benefit
Of course, you can claim tax benefits on the home loan only if your home is ready to live in during that financial year. Once the construction on your home is complete, the HRA benefit stops. If you took a home loan, got possession of the house, have rented it out and stay in a rented accommodation, you will be entitled to all the three benefits mentioned above. However, in this case, the rent you receive would be considered as your taxable income.
Q- 7. I have a home loan in which I am a co-applicant. However, the total EMI amount is paid by me. What is the total income tax exemption that I can avail of ?
Yes, you can claim income tax exemption if you are a co applicant in a housing loan as long as you are also the owner or co owner of the property in question. If you are only person repaying the loan, you can claim the entire tax benefit for yourself (provided you are an owner or co-owner). You should enter into a simple agreement with the other borrowers stating that you will be repaying the entire loan. If you are paying part of the EMI, you will get tax benefits in the proportion to your share in the loan.
Q- 8. I have two housing loans on two different properties. Can I get tax rebate under sec 80 C of both the loans?
Yes, you can get the 80C benefit on both loans. However, the total amount that you will be entitled to will be a total of Rs 150,000 (Rs. 1 Lakh up to A.Y. 2014-15) across both the homes.
The interest paid on a home loan is not directly deductible from your salary income for either of your flat loans. Income from house property will be calculated for each flat you own. If either of theses calculations shows a loss, this loss can be set off against your income from other heads. Please note with effect from financial year 2017-18 Govt has restricted the limit of set off of loss from house property against other heads of Income to Rs. 2 Lakh. Till financial year 2016-17 there was no restriction and assessee was allowed to set-off any loss from house property against other heads of Income. Please note the restriction is placed on set-off of losses and not on the amount of home loan interest that can be claimed as a deduction under Section 24 for a rented house property, the losses which could arise on account of such interest repayment can be set off only to the extent of Rs 2 lakhs. Such loss in excess of Rs. 2 Lakh can be carried forward for upto 8 Assessment Years succeeding the year of loss and can be set off against Income under the head House Property.
As for Section 24 deduction, on your self-occupied house you can take advantage of interest payments up to Rs.2,00,000 (Rs. 1.50 Lakh up to A.Y. 2014-15). For the other property, you can claim actual interest repaid, there is no limit for the same.
Q- 9.I live in Delhi in my own house. In 2011, I took a housing loan to fund the purchase of an under-construction flat in another city (Faridabad which comes under National Capital Region of Delhi but otherwise falls in Haryana). It is expected to be completed in FY 19. I haven’t claimed any tax benefit so far. What happens to the loan installments I have paid so far? Can they also be claimed for tax benefit?
According to the Income-tax Act, 1961, where the property has been acquired or constructed with borrowed capital, the interest payable on such capital for the period prior to the year in which the property has been acquired shall be allowed as deduction in five equal instalments beginning from the year in which the property is acquired. Thus, the interest included in the loan instalment paid by you during the construction period shall be eligible for deduction from the year in which the flat is acquired/construction is completed.
The principal amount of the loan repaid till date shall not be available as a deduction under section 80C till the time the construction of the flat gets completed. Once the flat is completed and the possession is handed over to you, you will be eligible to claim deduction for interest paid on the loan under section 24(b) and principal amount of loan under section 80C. The total amount of deduction available under section 80C shall be limited to Rs. 1.50 lakh (Rs. 1 Lakh up to A.Y. 2014-15). Thus, as of now, you are not eligible for any tax benefit on such loan repayments.
Q. 10 Is there any additional deduction which I can claim in respect of Interest on Housing loan in addition to interest Under Section 24(b)?
Ans. Finance Minister inserted a new section 80EE relating to the additional deduction in respect of interest on loan taken for residential house property. Assessee can avail the benefits of this section in A.Y. 2017-18 & subsequent assessment years till the loan is repaid. Purpose of this section is to promote house ownership & give a fillip to a number of industries like steel, cement, brick, wood etc. besides jobs to thousands of construction workers. to get more information on the please read the Full Article – Section 80EE Income Tax Benefit on Home Loan Interest
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Things you must know about tax benefits on home loan
1. Home loan borrowers are entitled to tax benefits under Section 80C and Section 24 of the Income Tax Act. These can be claimed by the property’s owner.
2. In the case of co-owners, all are entitled to tax benefits provided they are co-borrowers for the home loan too. The limit applies to each co-owner.
3. A co-owner, who is not a co-borrower, is not entitled to tax benefits. Similarly, a co-borrower, who is not a co-owner, cannot claim benefits.
4. Housing companies usually require all co-owners to be joint borrowers to a home loan. Loan providers specify who can be a joint borrower for a home loan.
5. The tax benefit is shared by each joint owner in proportion to his share in the home loan. It’s important to establish the share for each co-borrower to claim tax benefits.
6. The certificate issued by the housing loan company, showing the split between principal and interest for the EMIs paid, is required for claiming tax benefits.
(Republished with Amendments)
hi, my EMIs for home loan repayment started in August 2010 but I moved into the house on 1st Jan 2011 because the house wasn’t ready – furnishing, etc. was underway, Till this time (August ’10 to Jan ’11) I stayed in a rented apartment. Will I be eligible for 100% interest rebate paid for 5 months (aug-dec ’10)?
I have my housing loan in joint name of my wife, but I am paying of the loan EMI, Can I claim 100% of the repayment of the principal amount of loan as deduction under section 80C and deductio for the repayment of the interest portion of the EMI under section 24 of the Income Tax Act.
thanks & regards
Deepak
I have taken a home loan with my father & my brother. My name is second in home loan. Property is also on the name of My father, brother & me. The total repayment was done by my father during complete year on cash & cheque. Am I able to take 100% tax benefit on this repayment. Please advice me.
I have taken a Home Loan with my father (Father as co applicant).. how ever The property owner is only My father.. am i eligible for the Income Tax benefit.. and if not..is there any solution? please help on this.
Ifa person purchases house in the name of his wife by raising funds from his CPF and loan from the bank jointly in the name of wife and himself( first name of the wife), The loan is being returned from his earnings. Kindly clarify if heis eligible for getting the rebate under section 80 c both for principal upto Rs100000/- and interest upto amount 150000/-
Sir, I have taken a Home Loan of Rs. 15,30,000/- from SBI for Flat in the month of march 2010. The flat is under finishing satge still not handed over & hence not occupied. Bank is deducting monthly repayment of loan. So far 95,000/- as Principal and 1,00,100/- as intrest. what benefit should I get from Income Tax for this year i.e.2010-11
My service place i.e. KHAPERKHEDA is different than my flate area i.e. NAGPUR but in same district @ 25 km away. I am residing in Co.’s qtr. and paying Qtr. Rent not Subsidised. Please tell me what benefit should I gate on Income Tax
I have taken a home loan – i use to take the interset deduction for the interest pain on loan.
the EMI which includes the principal part also can i eligible for tax deduction under 80c.
In nut shell my principal amoutn & the interest upto 1.5 lacs i can claim under tax deduction
please advise or email me at sanmotratarun@yahoo.com
9871032402
I want to take home loan. But the plot is under my mothers name. Let me know am I eligible for Tax exemption?
Sir,
I have taken combined loan for purchasing site and construction of House in Oct 2007. The construction work is pending, not yet finished due to some personal problems. I stay in rented house at Bangalore and house being constructed in other district in Karnataka.Now my question is can I avail HRA rebate since I have not occupied the house. How many years of time can be availed for construction. I have obtained Principle & Interest portions details from the bank.
Thanking you.
Ashok DT
Dear Sir,
My wife has taken a housing loan from SBI and she is taking the tax benefits in the income tax. But the Bank shows my name in the loan statement as a first name and my wifes name as second. Can we both take the benefits of 80c during filing of the Income tax in the coming financial year. Please note the EMI is now being paid by my wifes business account. Should we change the bank and transferred to the joint SBI account for the benefits?
Regards
Chiranjib Mukherjee
9330166064
Dear Sir,
I am a Central Govt. employee and have bought a flat, from a renowned builder, which is still under construction. I have availed HBA from my office and also taking loan, my wife being co-applicant.
Will I get tax benefit for the HBA availed (both principal & interest). Can I also avail 100 % tax benefit (both principal & interest), when my wife is not claiming any. It is also to say that I am the sole owner of the said flat.
Regards
JK Saha
Before possession of house, am i eligible for tax benefit?
sir,
i am working in central govt. my wife have taken LIC policy before marriage, can i get income tax benift
My Father in law having a lot of property .. but he did’nt maintain any proper income tax . so i want to take a legal action regarding this whom i want to contact .. could you please guide me and i want to the income raid department contace number
My Father in law having a lot of property .. but he did’nt maintain any proper income tax . so i want to take a legal action regarding this whom i want to contact .. could you please guide me and i want to the income raid department contace number
Hi, I would like to know whether a co-applicant is eligible for tax benefits?? My dad is the main applicant as the site was in his name and my mom’s name (joint applicant). But I am the co-applicant for the home loan taken for constructing the house. So am I eligible for tax benefit because he showed my salary and took the loan of 8 lacs additional to the loan what he took? I am planning to take a personal loan of 2 lacs. Please advise so that I can proceed with this.
i have my own flat and satying there. I am claimimg tax benifit for Interest Repayment. My mother is dependent and staying in a rented house and I ham paying the rent. Whether I can claim HRA Benift.
I have a house loan and I’m paying EMI, But the property registered on my wife name who is dependent on me.Can I getting a tax benefit.
Hi,
With above comments i have few doubts, please clarify:
1. I am planning to buy house with home loan under construction linked, it will be over by 2012. So under IT can we claim interest and principle. As property possession will be in 3 years from the date of loan disbursement FY ?
2. As property is under construction and after that self occupied. For interest, can we consider income to be zero for calculation of interest deduction ?
3. I am planning to buy house along with wife as co applicant. We will both take a single home loan and we have single joint account. Can we both claim interest from EMI under income from house property each upto Rs.1,50,000 (Total Interest for FY amounting Rs.3,00,000) and principal from EMI under 80C each upto Rs 1,00,000 (Total Principal for FY amounting Rs.2,00,000) ?
Rajeev
I’m a Govt servant Gruop A officer, I have purchased a house taking loan and I’m paying EMI, But the property registered on my wife name who is dependent on me. Our accouts poople says, I can not claim IT-Tax, why, is there anyway to get I-Tax benefit
i had purchase a home on my wife name and taken the loan from a HDFC Bank, and i am the co-applicant in this loan.i am paying the full emi from my owm account. she is not working and doesn’t take the benifit of tax rebate. Can i avail full tax benifit(Principal+interest) in my earnings.
i am purchasing a house on my wife’s name and i am joint applicant in both the aggrement with the seller & in home loan application whether i should get itax relief or not?
sir,Ihave purchased a Flat{home}loan in LIC and registered on my name only but emi is being paid through my wife salary account.
now , can my wife get income tax deduction ?
I Took loan from LICHF of Rs 8.00 Lks,@9.25% interest rate for first 5 years (Total period 10 years).The EMI is aprox.10380/- .Is it correct.
If so,What is the PRINCIPLE AMOUNT &WHAT IS THE INTERS AMOUNT PER YEAR.(To take IT Purpose).Kindly give reply.
JJNR
Dear sir
I have taken a joint home loan with my wife for a flat in joint name (50:50). My wife is also working. I am paying whole EMI. The possession is 3 yrs away. This is our second house and first one (in other metro) is on rent. WE ourselves are on rent in this city.
Now can both of us claim home loan benefits? If yes, how our HRA should be handled? What would be the limits for interest part of EMI in this case?
Sir,I have take home loan with joint name in april 2010 on under construction house and will get the flat in dec2011
my preEMI started from may 2010.Request you to please guide me with latest rules for home loan tax benefits so that i can take max benefits.
Thank you in advance.
My husband and I are purchasing a house on loan. To make the personal contribution I would be borrowing a sum of Rs. 10,00,000/- from my brother. What are the income tax implications of these Rs. 10,00,000/-?
Dear Sir,
I have just purchased a resale flat and taken home loan for that.
I have investments under 80C (LIC+PF)=Rs.60,000/-. Considering this how much tax benefit is further possible declaring prinsipal and interest amount. what i heard that 1.5lakhs can be exmpted under 24B and only Rs.60,000/- (considering existing LIC & PF deduction) of Principal amount can be useful for tax deduction, is this right or it will be only Rs.40,000/-(capping of 80C considered as 1 lakh only)?
Somebody also told me that now the capping for 80C deduction is raised to 1.5 lakhs (of which home loan principal amount of 1lakh will be considered under deduction).
Request you to please guide me with latest rules for home loan tax benefits so that i can plan my partial prepayments to take max benefits.
Thank you in advance.
Dear Sir
I have taken a laon. 1st applicant is myself and 2nd applicant is my wife. At present I am living outside the country and my wife is working in India. Is it possible that my wife can take the full tax benefit for the Housing loan? And is it manadatory that the EMI has to be paid from her a/c only?
thanks in advance
My brother has availed Housing Loan and I am co-applicant. Can we both claim tax rebate? Ownership of the flat is in my brothers name. Please clarify. Thanks
I have purchased aflat and taken loan both with my wife’s name as coapplicant.First 12 EMI’s will deduct from her salary account and rest from my account.In what proportion we can claim tax benefit for principal and interest part for the financial year.Let the EMI be 30000 per month.Thanks.
My father owns a house in Bhopal.My father is retired.The house has single story. Now we want to build a second story for our future use. I will not be living in that house for coming 10 years. I have enquired with the bank for a home loan of about Rs 15 lacs and they have told me that I can get a home loan for building the first floor provided I am my father apply as co applicants.
My question is will I get income tax benefit for the home loan in such scenario. Some people have told me that in case my father in his will writes the roof(ceiling) of the house on which the first floor has to be built, then I can get the IT benefit. Please advise if this correct and also what are the other possible options available to me and which one would be most beneficial to me. We do not want the registry of the entire house to be transferred from my father to my name .
I have booked a flat as a co-owner with my wife who is the owner. My wife being a bank employee has taken a bank loan on her sole name. Can I get the income tax benefit against the repayment of the loan paid from my wife’s sole name account?
Hi,
I had bought a home loan in 2005 and I used to get all the tax benefit for this but now I am planning to close the home loan by repaying all the amount, but after this I am planning to buy one more new house (which will be again used for self) on home loan, now my question is will I get the same tax benefit even for the 2nd home loan?
Hi , i have taken home loan for construction purpose from HDFC BANK. The property owner is my mother and i m paying the loan amount . so can i get income tax rebate.???
Hi, You have clarified that income tax benefits of home loan principal and interest paid can be claimed “individually” in case of a joint home loan if the property is also owned and occupied jointly, EMI is paid in proportion from independent sources of income of both joint holders. However, the FAQs on the income site seem to indicate that the maximum limit is 1.5 lacs for interest and 1 lac for principal irrespective of the number of applicant / owners. Can you pls clarify this point.
I had purchase a home on my wife name and i am co-applicant. And loaon is on both’s name. The possesion is after 2 yrs.
Can i avail tax benefit right now or I can avail it after possession?
it is stated,that I can claim deduction u/s-24 of income tax even if I take loan from my friends and relatives or unregistered society and pay interest for the amount of loan. but it is not clearly mentioned in the income tax book. so kindly help me to find out such book so that i can show that book to my head of office and can avail the facility of tax rebate….
Currrently home is in father’s name. If I want to purchase 50% of the ownership of the flat, can I get home loan for it? If yes, will I be able to claim tax benefit associated with home loan?
Hi All,
I have bought a house in my wife’s name. Where i am the co-applicant. They are deducting the EMI from my wife’s account. Kindly let me know, whether can i avail Tax Exemption, if Yes, how to go about that.
Thanks
Sir, can i get the income tax benefit if i take housing loan for repair of the house.
Kindly clarify to me at the earliest.
Regards,
M. SUNDARESAN
I had taken a loan of INR 6.9 Lakhs for renovation of my family house at my native for which I pay an EMI of Rs.8K per month 6 months back before my marriage. My dad is the applicant and I am the co-applicant. My dad does not have any source of Income.
Now, I have purchased a house in Chennai and the loan I have received is INR 26.5 Lakhs for which I am to pay Rs.24K pm as EMI with my wife as applicant and me as co-applicant.
Due to operational reasons I plan to stay in a rented house for the next two years and I am to rent this new house which is far from my place of work.
Now, my question is that can I can tax benefits for both the houses? If so is there any cap on it?
Thanks,
Esakki
I have taken a Home loan jointly with me and My wife it is self occupied property.
I paid Principal Component rs 203959.47 and Interest Component 253944.53 for this F.Y., Hence I can clime Principal Component rs 101979.735 and Interest Component 126972.265 as 50% share. Up to last year my company allowed the above interest component ratio , but this year they said I can clime only Rs 75000 part of interest paid as 50% share and it is maximum 1.5L allowed for Joint loan
Can I clime entire 126972.265 in interest part?
Is my company correct if wrong how can I challenge them with some Income tax evidence?
Dear Sir,
I have my dependent mother as co-owner and applicant in the house I purchased. All the EMI is going from my account can I claim the 100% interest and principal benefit in this case.
i had purchase a home on my wife name and taken the loan from a HDFC Bank, and i am the co-applicant in this loan.i am paying the full emi from my owm account. she doesn’t take the benifit of tax rebate. Can i avail this tax benifit(Principal+interest) in my earnings.
I have taken a housing loan. My wife is prime applicant and I am co-applicant. The EMI is being paid from my wife’s bank account. My wife is not claiming the tax rebate on this.Can I claim tax rebate on the housing loan on which i am co-applicant? I am arranging the money for bank account of my wife. My company says that you can not claim because EMI is going from your wife’s bank account. My house is on my wife name. Kindly help me…
I have purchased a home on name of my wife and have taken loan on wife name. Can i take Income Tax Deduction ?
Sir, I am a Banker and I had availed Housing loan for construction in Ground floor which I completed during the year 1998 for which I pay yearly interest of Rs. 16000/ and installment Rs. 22000/-. Again I borrowed capital for extension of my house on First floor which I completed during the year 2009 and yearly interest for the second construction comes to 32000/- and installments Rs. 70000/- Please let me know the total interest deduction and principal amount. Shall I get the benefit of interest/installment on Second construction.
I have taken H/Loan Rs. 3.5 lacs from my office in 1997,EMI is Rs.1950 p/month and getting income tax benifit.Now I have booked another flat,received H/Loan from SBI Rs.12 lacs,paying EMI is Rs. 12744.00 p/month from January’2008.This flat is under construction, may be completed on April’2010.I am paying more interest than first H/Loan.
Could I get the income tax benifit from 2nd. Home Loan which is under construction.Thanking you. Awaiting your early reply.
My question is that My father & myself have booked a Flat–which is under construction.
I am the joint owner of property(2nd name is mine).
Can I pay 100000/- of the principal amount and claim as deduction u/s 80 C?