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)
HLO/SIR
I HAVE PURCHASED A HOME OF MY MOTHER NAME.I HAVE TAKEN SBI LOAN JOINT NAMES.
MY MOTHER AND ME BROWER AND CO BRROWER.BUT MY MOTHER IS HOUSE WIFE.SHE IS NOT SUBMITTED THE ITR.THEREFOR I CLAIM FULL TAX BENFIT OF INTEREST AND PRINCIPAL AMOUNT.
Hi,
I have a doubt regarding claiming tax benefit against housingdoing the repayment of the an. I am the coowner and Co borrower for it..
I have received the ownership by gift deed. Inspite of that i am doing the repayment of outstanding loan.
am I applicable to claim tax exemption?
Can I get tax benifit on bank loan for house renewation
My Question is can I claim stamp duty charges in case of resale property?
Kindly clarify that–
Loan for flat renovation can be claim for Income Tax benefit on principal repayment and interest paid.
I purchased first home in Mumbai in 2008, the home loan for this property was repaid in 2010. I occupy this home.
in 2011 I purchased 2nd flat in Mumbai with a home loan, I have rented out this flat. I get Rs. 20K as rent and I pay EMI of Rs. 86K for this flat. I have currently only 1 home loan for the 2nd flat.
I have 2 questions:
1. What is the tax benefit I will get in this scenario?
2. Someone has suggested me not to pay prepayment and take benefit of interest that I am paying for this home loan.
Request your advice.
Thanks
ALok
I purchased a flat and got possession in 2014 my parents live in the new flat and myself live at another location on rent which is around 40 kms from my new flat. can i get the benefit of home loan as well as rent paid for income tax rebate.
Secondly during the purchase of the flat i had paid and vat and service tax can i get the refund if filed the return.
Hi,
I have booked a flat and paid the 20% of amount. Now i have got my wife’s name added as co-applicant to the same and jointly we are going to apply for housing loan. Can you please let me know do she need to show her share for 20% amount also to be eligible for equal share? Please reply.
Thanks in advance.
Regards
I have taken a home loan on both me and my wife’s name.
The house is also registered in both of us names.
But the Loan EMI is getting deducted only from my account.
Is it a issue for my wife to claim tax befinits, being she is not paying EMI directly from her account.
Dear Sandeep
I had paid an interest of Rs 4,34,734/- on a flat before the possession. I got the possession in year 2011. Hence, I have been claiming the rebate on 20% of the total interest (Rs 86947/-) every year.
Now, I had sold the flat in year Jan’ 2014. Can I still take the rebate of the remaining 20% of the interest paid before the possession of the flat?
Regards
Rahul
Dear All,
Its been 14-15 month I am having House loan and utilizing tax exemption u/s 80c and 24. Now I am planning to sell my property and will be closing my House loan, in this case I wanted to know is there any hidden rule which can force me to return my incometax exemption as I will be closing my loan within 1.5 year?
Thanks,
Vikash
Respected Sir,
I and My mother(Co-borrower) jointly have taken a Home Loan from UBI for constructing house. The house is owned by my mother only. I am the first-applicant and my mother is co-applicant for the home loan. Can I get Tax benefit against the loan?
Hi,
I am paying home loan EMI from Feb-2014 for under construction property, Possession will be Dec-2014.
Can I claim Tax Exemption for FY 2014-15 ? If Yes, Can I claim exemption from April-2014 EMI ?
Sir,
I am payling 7K per month as rent and my hoam loan EMI is starting from May 14 possession will be given to me next year. Can I claim HRA, and tax benefits on hoam loan. Please clarify. and also suggest how I can save my tax in effective way
I had given my provisional tax certificate of home loan for income tax computing….but now when I got the final certificate the interest part is lower in that….the principle is already occupied with 1 lakh so what will happen….will I have to pay more tax on the difference between interest in provisional certificate nd final certificate. …plz answer
Hi
I have rented my 1st house for 8k/pm with no loan. I reside in my 2nd house having 29L bank loan. My gross income is 12L/pa. Can I claim tax rebate on 29L home loan on my 2nd house showing additional income from 1st house..?
pl clarify and help me out.
I have purchased a home on name of my wife and have taken loan on my name and my wife jointly. Can i take Income Tax Deduction ?
Hi,
I own a house and iam enjoying the IT benefits through home loan.
My wife is working and if i buy one house through loan on my wife’s name can she enjoy the same IT benefits.
Or is there any rules that this second property will not have any home load IT benefits?
Kindly advice
I have recently purchased a new flat. This property is jointly owned by me & my wife as co-owners. We both are salaried professionals & have taken a joint loan for this property as co-borrowers.
I already own a house in my name (first floor of my parents house) where we presently reside & will be living in future as well. I had taken a loan for the construction of house for this first floor on which i had claimed exemption and loan has been closed in year 2013.
The new property under discussion will be Second property in my name & First in my wife’s name.
Now the question here is, with above situtation what is the max. deduction of interest under section 24 and on principal under 80(c) we both individually be able to claim.
I want to ask you that, if i plan to buy a house by raising loans from Co-operative Bank (means Patpedhi Bank).Will I be eligible for tax benefit from all sources?
kindly give me reply.
Sir i have refund my housing loan in 2013 fincial year amount is 559000 (interest+principal) my interest is 282000 and i am clame cumilitive interest every year can i get tax benifit on interest amount this year
I have taken a housing loan. The property is in name of my father and I am the only son. I am the applicant of housing loan and my father is the coapplicant and am paying the complete EMI for the house. The house is self occupied by me and my father.Sale deed does not comprise of my name.
My company is not accepting it for Housing Loan exemption for income tax since I am not the owner.so I am showing HRA for tax exemption.
My question is while filing IT return ,whether I can bring HRA as a taxable one and bring my housing loan for exemption and apply for refund.
(Can I claim tax benefit on under 80C (Principal) and Interest can be claimed as a deduction under Section 24. claim up to Rs. 150,000 or the actual interest repaid whichever is lower).
sir
i purchased a plot in my wife name and i am constructing house in the same plot by taking a home loan .am i eligible for tax benefit.
My wife is not having any individual source of income. As per sentimental issue i purchased the land in my wife name.
I have taken a house loan for purchasing residential Flat in my wife name. In respect of loan she is an applicant and I am a co-applicant. I am paying 100% of the loan installments. Am I eligible for tax deductions under sec 80c & sec 24 since my wife is house wife.
Awaiting a reply,
I have taken two housing loans for same property 1 under Home entity loan and other for Improvement and renovation purpose , Am i eligible to claim interest and principal exemption on both the loans in my incometax Kindly suggest
without possession, tax benefits can’t be applied (interest & principal) ???
Q1. For a loan in joint name, husband & wife, both in service, shall we repay loan (EMI) in any ratio that suits our salary?
Q2. In that case, either two ECS/cheques from both persons for each EMI are required or can we repay single ECS/cheque from one as per requirement all through the year(say in alternate months for 50:50 sharing; 8 + 4 in case of 2:1 sharing)?
Q3. Shall the bank/financial institution issue separate CERTIFICATE to both of us?
I purchased a flat in May,2013 with a home loan of Rs 20 Lakhs and paid pre EMI interest till Feb14 amounting to Rs 140000.I got possession of my Flat in Feb14 and paid first EMI in Mar14 of Rs 20000 consisting of Rs17500 as interest and Rs2500 as premium.Please suggest me the tax benefits that I may avail in detail.
I have taken a house loan for construction of a residential house in a plot in the name of my father. Though he is a co-borrower, I am paying 100% of the loan instalments. Am I eligible for tax deductions under sec 80c & sec 24 since I am constructing the house on my fathers property.
Awaiting a reply,
Regards
I own a housein Mumbai and I have been staying there.I do not have any loan on it. Can I buy a second house and can claim IT benefit on it.Can I buy a second house in Bangalore
hi sir,
house property is both husband and wife name and loan taken also both names. can both get IT exemption for the interest Rs. 1,50,000/- or not? if any govt. order or circular no available please give me.
What is the procedure for the interest paid on home loan on prevous year i,e interest paid on the home loan in year 2011-12 and 2012-13. I got the possession in current year 2013-14 and EMI is also started wef May 2013.
An early reply is requested since the year ia already on the completion.
Regards
JK Grover
Hi,
I have taken the home loan for renovation in January 2013 and i am continuously paying EMIs. But the property is on the name of my father, Who is no more in the world.
My query is that I have shown all the necessary documents i.e. (EMI statements from Bank, interest certificate etc.). However, My company CA is asking for my ownership proof/possession proof for tax exemptions. I don’t have any such type document.
Please let me know what is the alternative solution for the same to get the tax benefit in favor of me.
Regards,
Gaurav Arora
if two home term loan on single home can i take profit of interest and principal rebate u/S 24(b).
I am planning to buy a house in my native, while I will be living in some other city. I will be renting that house.
Does the complete interest paid by me becomes non-taxable income?
Thanks!
To claim Income tax exemptions on Home Loan, Is there the maximum time limit, within which the total loan has to be availed and the time limit within which the house has to be completed ?
sir
i purchased a plot in my wife name by taking a loan from employee society (purpose mentioned as house purchase) and i am constructing house in the same plot by taking a personal loan(purpose mentioned as house construction)am i eligible for sec 24 concession.
My wife is not having any individual source of income. As per sentimental issue i purchased the land in my wife name.
Can you reply to my request by today as 5th march is the last day for submitting the data to my company.
Dear Sir,
My wife has been gifted a plot by her mother. I am constructing a house but she is house wife not an earning member. The home loan is on both names where as I will pay complete EMI.
Question 1- Can I claim tax benefit u/s 80C.
Question 2- Can I Claim tax benefit u/s 24.
Hi,
I purchased one builder flat in ghaziabad.I have the registery of my flat but don’t have any possesion kind of letter.My office accound said to avail house loan exeption on income tax you will required a possession letter not registry.
Kindly let me know what documents are required for the same.
i took a loan from sbi in jan 2011 to purchase a yet to-be constructed property. i have been paying EMI since feb 2011. the tentative date of possession is jan 2015. what are the tax benefits that i can claim and from when? thanks
My freind has purchased a Flat in Joint name with his wife with Bank Loan. Currently freind and his wife are stay in company accommodation provided to my Freind for which compay charges Rent Perquisite. My freind and his wife Rented out their flat, please guide on following points
1.Flat is Rented out and Both are getting Rent equelly since October 2013
2.Both are contributing Loan EMI
3. Both are salariid persons
4 Whether Loss on house property can be set off against Salary income, since there is loss on account of Rented out only for 6 months
5 Total Interest out go on account of Housing Loan during Currnt year is Rs 312000/-
6 Both are getting Monthly Rent of Rs.16100/- each from October 2013
I and my husband took two housing loans jointly,a total of 29,oo,ooo.He claimed 50% of interest of Ist housing loan only. can I claim 50% of Ist housing loan and 100% of second housing loan for tax rebate of 2014-2015
I have taken a house building loan from registered co-operative society. Can I get income tax rebate? Pls reply
Dear Sir,
I have a home loan in which I am a borrower & my father is co-borrower. However, the owner of the property is me only & the total EMI amount is paid by me. What is the total income tax exemption that I can avail of ? And what proof i will have to produce to avail the same?
Can I claim principle amount of my home loan under section 80C even if I didn’t get the possession yet?
Dear Sir,
I am living in my parent’s house and paying rent to my mother. In addition, I also bought another house in same vicinity and took home loan for same. The house was ready to move in. But some renovation is going on, so due to this I am still on rent in my mothers house.
Can I claim HRA, deduction for principle payment and Interest benefit under section 24?
Thanks in advance
1.An official living in govt. quarter in delhi and paying home loan emi for flat in Gugoan(haryana)that is locked and not rented. CAN he claim the tax benefit on housing loan EMI
2.An official living in rented house in delhi and paying home loan emi for flat in Gugoan(haryana)that is locked and not rented. CAN he claim the tax benefit on housing loan EMI and HRA rebate on rent paid
thanks
DKKAUSHIK
Sir, I had taken HBA in 2011-12 for ongoing projects of RPS Savana. Till date I have not got offered from the builders. One of my friends told me that exemption of Rs. 150000/- on account of interest is only possible if the builder would offered me the possession in the financial year 2014-2015 otherwise only deduction upto Rs. 30000/- can be claimed.
My daughter had a housing loan in her name before marriage. The property is also only in her name. She was employed before marriage and was claimimng exemption.
Now she got married and after marriage only her husband is repaying the loan and she is only house wife.
Whether her husband can claim exemption? Some say the property should be owned by both and the husband should be made co owner. some say the husband should be made co borrower in bank loan.
Please clarify me.
A.Rajagopal
Hello,
I took a home loan and my wife is co-borrower. I have registered the property on my wife’s name but the EMI gets deduct from my salary account and in bank also i am the main borrower, when i submit the interset certificate my company says that that the property is not on my name. Can anyone please show me the way.