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 have one property in Pune & paying home loan interest of approx 150000/-. The rent is approx Rs. 100000/- per year.
I have one more property in Thane, in which I am living. The Home loan interest I am paying is Rs. 500000/- approx for this home.
Can you please let me know, how can claim for tax benefit?
I took a Home Loan from Railways (Being Railway Employee) in March 1995. I have refunded all instalments of principal amount of the loan in August 2011. I have paid interest on Home Loan at a time in Dec. 2014 in full settlement. I have never availed income tax deduction on interest on Home loan in any format like accrual basis or actual payment basis.
Please inform me whether I can get income tax benefit for the entire amount of interest paid in this financial year 2014-15.
Sir, I have been allotted the flat from Gr Noida authority under BHS13 (BUILT-UP HOUSES SCHEMES. I am paying the installment (six monthly) as per payment schedule of Gr Noida Authority. Payment schedule (installment) clearly indicates the principal amount and interest amount. The total interest amount deposited is more than 1.5 lacs. My question is : Can I avail Income tax rebate? Please advise and tell IT clause and sub clause of the same to convince our Finance Deptt.
Regards,
S Chandra
I AND MY WIFE ARE JOINTLY TAKE HOUSING LOAN OF 35 LAKHS.WE ARE WORKING. TO SUBMIT IT WHE DECIDED TO SPLIT THERE INTEREST OF HOME LOAN IF ANY CRITERIA FOR SPLIT UP EQUAL SPLIT UP IS NECESSARY
Dear sir
I have purchased a plot with 75% loan on it. Can i take some income tax deducion or benifits
Hi
My wife has taken the home loan. She lost her job and I have to take care of her loan repayment. Can I claim the tax benefit for the home loan repayment.
Regards,
Piju P.K.
My Husband has availed a housing loan in his name. can i get tax benefit on his loan certificate (principal + accrued interest) half share
Dear Sir
I have two home loans for two houses. In one house I am already living and another house is in my possession, but no one is living in that house. Neither that second house is let out nor anyone living there.
Can I avail home loan benefit on both houses. How I can avail benefit on interest & principals paid against both loans.Please suggest
I have a property in my mother’s name. I have taken a loan from the bank, Can i claim tax benefit on that.
hi
i have a flat in registered my name only.Booked on Mar 2013 and part registered Oct 2013 and final registered on Mar 2014, EMI was started Oct 2013. Home loan sanctioned join name first name for me and second name for wife. EMI is paying through wife’s salary account.pls let me know who will get benefit for income tax and it is required to change EMI will be deducted to our joint bank account instead of wife’s salary account.
SIR,
I AM GOVT. EMPLOYEE. I TAKEN A HOME LOAN FROM NATIONALISE BANK. THIS PLOT AND HOUSE IS ON MY NAME. MY WIFE IS TEACHER. SHE ALSO TAKEN A HOME LOAN FROM HER SHCOOL CREDIT SOCIETY FOR SAME HOUSE (THAT HOUSE IS ON MY NAME). IN THAT CASE THE HOUSE IS ON MY NAME, PLEASE YOU GUIDE ME, CAN MY WIFE TAKE BENIFIT OF TAX SAVING FOR HER HOME LOAN FOR SAME PROPERTY.
if we purchase house from our income.can we avail deduction u/s 80C
If loan taken by husband and instalment is paid by wife.wife is the owner of house.Who can claim deduction?
I stay in a flat which is loan free. I have purchased another flat for which I am co-owner alongwith my wife. I have not yet got the possession of the flat. Can I get the tax benefit of housing loan for this year or shall get the benefit only after getting possession.
My Home loan me & Co-owner My wife, i paid to Home rent to My wife. this condition possible to income Tax benifit.
Hi,
I live in a rented property. I am constructing a building to rent out. I will be taking loans to construct this building.
How much of tax rebate will I get on the loan interest repayment in following two scenarios-
1) The property is unoccupied
2) The property is occupied
Thanks & Regards,
Rij
i took loan of rs. 10 lakhs from govt of haryana for constructiong my house. interest payable is 9 percent.I am repaying the loan at an EMI of Rs. 10000 per month amounting to Rs. 120000 per yr.In Haryana for a govt loan, principal is paid first and when it is finished then interest is paid in instalments.I am now living in my own accomodation constructed out of that loan. How do I use section 24 to claim tax deduction on interest when actially my EMI does not bifurcate into principal and interest. Please suggest what i can do in this situation.
I have procured a house in year 2013-14 for rupees 37 lakh. I have taken 25 lakh loan from a nationalized bank. It is my first house.
I stay at government allotted quarter as the house is away from my office. I do not get HRA.
I have not given the house on any rent and kept my belongings there which I use as and when required.
I have paid Rs. 35000/- towards principal and rupees 265000/- towards
interest.
Shall I am eligible for Rs. 200000/- under section 24 and additional Rs. 100000/- under section 80EE to get rebate.
My home is on my mother’s name. I have taken the Housing renovation loan on my name. Can I apply for Tax deduction?
Dear sir, I took joint home loan with my wife. Although only my wife is owner of that home. Home loan EMI is 44876Rs month. Can we both can get rebate in income tax? we both are government teachers.
How much toral rebate we can get?
With best reagrds,
Hariom sharma
9812631166
hariomsan@rediffmail.com
sir I have taken home loan of Rs. 40 lacss jointly with my wife. we are both are paying instalments. We have sold the property in 2014-1. Whether we are eligible for incometax benefit for the year 2014-15 for interest on loan and principl amount paid by us.Kindly clarify
i along with my wife/daughter in law Co owners of flat of Rs 5o lacs and taken joint loans of Rs. 40 lacks in april 2012 or 2013 .Whether we wiil be eligible for rebate of interest on loan and principal payment on 50% basis . Kindly clarify
Pl clarify about a situation where housing loan is taken in the names of husband & wife jointly. Husband is employed but wife is not . He pays for the instalment by way of rent to his spouse who inturn meets EMI . He claims HRA based on the rent paid to his spouse. can the wife claim deduction of interest u/s 24.
i am the co-borrower of the housing loan with my wife ,who is owner of the property, but, she can claim the total interest for income tax rebate .
My EMI had started from 1st April 2013 and i got a project completion letter from developer on December 2014. In between these period I have paid around 4 Lacs interest. I am planning to move to my home from April 2015 . Till march 2015 i’ll continue to stay on rent.
I have a below question.
– As i am staying in a rented house , so i’ll claim HRA. While claiming the HRA can i claim the 1/5th part (i.e 80 K) of the EMI i paid so far ?
I booked a constructed flat rs. 20.00 lac in. Bhopal in Jan 2015 and possession will be handed over in June 2015.How will I claim tax benefit.
I am planning to pay back this housing loan in next 2 years to get maximum benefit and then purchase another property. My EMI will start from Feb 2015.
What should be the strategy to maximise my return.
I have purchased a plot in name of my wife .can i get tax benefit ?
I have constructed 2 houses one at Cochin my duty place and 2nd at Pandalam my native place. I am occupying first house at Cochin. I have paid Rs.2249 towards interest and Rs.16039 towards principal for the first house at Cochin. For 2nd house I have made loan repayment of Rs.66259 towards principal and Rs.157101 towards interest.
I may be informed whether I get income tax exemption on loan repayment for both the houses. The first house was completed on 1998 and 2nd on 2012.
Regarding Q no. 9, While there is provision in section 24 requiring completion of construction, the same is not there in section 80C. Therefore I think one can claim benefit of principal repayment under section 80C even during construction period.
I had taken a home loan in August 2009 and last disbursement was made in December, 2014. Possession of flat is likely to be given in January 2015. Am I entitled to claim of Income Tax rebate on interest paid for FY 2014-15 i.e. AY 2015-16 of Rs. 200000 or Rs. 30000?
I have taken two loans on housing with LIC Housing finance for the same house. One is improvement/renovation and second one is Home entity loan. My doubt is Repayment of these two loans are eligible for exemption under Income Tax .
Hi,
I have two buildings at two different locations with housing loans against both of them. Till this time I have been staying in one and claiming both the loans interest as well as principal (one as self occupied and other as income from let out property). Now that I have moved myself to a new location for the purpose of job. Kindly clarify the following:
1) Can I claim both of these properties now as income from let out property?
2) Can principal be claimed for income from let out property also?
3) If I am going back to the base location, then can I discontinue showing income from let out property? Will there be any query from the department on this? If yes, what should I do?
Looking forward to hear from you soon.
regards,
Rajeev
Hi,
If we registered the property in FY 14- 15 can we claim the registration & stamp duty under section 80EEE & the actual interest paid under section 24??
Regards,
Pavan
Hi,
Whats is the maximum amount of tax deduction under section 24 of IT act of India, i have a home registered in FY 14- 15 & the same is not yet occupied by us.
2) Also can i claim the HRA for FY 14-15.
3) Do i need to show any deemed rental income on the unoccupied property?
Thanks in advance.
Regards,
Pavan
Hi,
I have taken a housing loan for construction of a house. However the house is still not completed and I am paying pre EMIs for the loan. How can I claim deductions for the pre EMIs paid.
Please advise.
Thanks
Hi,
I am holding two home loans. First house is self occupied annd rented out also. Second house rented out only. Can I claim income tax benifit for the interest paid for both the loans by showing the rental income of both houses. Is there any rule tht can claim the tax benefit only for one house.?Please reply.
Thanks,
Rohan
It is better to continue with the home loan or to forclose the loan.
Which one is better option take benefit of interest or forclose of housing loan?
Hi,
My husband has taken a flat in Bangalore, in his name,
we have not taken any loan for the first house.
Now we want to take Housing loan for the second house in Bangalore, we stay in Banglore only. Will the housing loan of second house can be showed for tax exemption
I am employeed in a MNC. I own a house with borrowed capital jointly with my wife. She is a house wife. Hence, I claim 100% principal & interest payment benifits under sec 80C & 24b of the IT Act.
However, my company does not allows 100% benifit under these categories as loan borrowed jointly, even after I get undertaking from the co-borrower that she is a house wife. In addition, company needs a certificate from the lender that the loan was sanctioned based on my financial position, which the lender has denied to give.
Now, company allows 50% benifit only. Remaining I have to claim as refund through ITR.
1) Is there any provision in IT ACT, Rules or notification or decided case laws for a company to get certifate from the lender ?
2) Isn’t sufficient, If I get undertaking from the co-borrower & I produce my bank account as a proof of loan repayment from my income ?
Please guide
I AM A PSU BANK EMPLOYEE AND HAVE RECENTLY AVAILED A SCHEMATIC HOUSING LOAN OF RS. 20.00 LAKHS AT A SIMPLE RATE OF INTEREST OF 10.25 % pa. MY PRESENT EMI IS TOTALLY APPROPRIATED TOWARDS PRINCIPAL ONLY . I NEED TO SERVICE THE ACCUMULATED INTEREST PORTION AFTER A CERTAIN PERIOD WHEN THE PRINCIPAL IS TOTALLY REPAID.
MY QUESTION IS CAN I NOW AVAIL INCOME TAX REBATE UNDER INTEREST PORTION WHICH GETS ACCRUED ON A MONTHLY BASIS BUT REMAINS UNPAID AT PRESENT.
TAX EXPERTS / ADVISORS / SENIOR BANK OFFICIALS WELL VERSED IN THIS MATTER MAY PLEASE ADVISE BACKED BY RELEVANT SECTION IF ANY.
REGARDS
—KSSS
Hello Sir / Madam,
Before marriage, I bought the house in Mumbai and was paying EMI and availing the Income tax benefits and I am the only owner.
After marriage, I went to university for study and all Home Loan EMI payment in being continued by my wife though she is not owner of the house.
We want my wife to get the Income tax benefit for housing loan.
Can you let me know if it is possible and how?
In this web page, I came across similar case where you have given the solution by making declaration under Benami Transaction Act. Can it be applied in this case as well?
Thanks and Regards,
Swapnil
I have applied for second housing loan in my name where my wife is a co-obligant who is a central Govt employee.50% of the installment amount will be borne by her and the flat to be purchased also in the name of both of us.Kindly inform whether both of us eligible for income tax rebate.
Sir,I want to know how and where to show housing loan interest while filing return online?
Me and my brother are constructing a house and have taken home loan of 20 laks. The construction is complete and interior work + painting is going on now. I m claiming home loan tax exemption for 1st time.
I have filled form 12c, house loan declaration and interest certificate from bank.
Is any possession/occupancy/completeion certificate is mandatory for independent house.
i have taken loan of rs 100000 from my company where i m currently working it’s pvt ltd company can i show it my income tax return and get deduction
Hii
We have take home loan for construction of home which is situated in Dausa city. My father is owner of the land. My father is first applicant and i am co-applicant. All EMIs are payed by me. My service is in jaipur and i live on rented house in jaipur. can i avail all three deduction named 1. Principal under 80C, 2. Interest under section 24 and, 3. house rent under 80GG.
Waiting for reply
I have two houses. First house I bought do not have any home loan. Second one, I have taken loan of 60L. Wanted to understand definition for second home loan. Currently I am claiming benefit of only 1.5 in interest whereas actual interest is almost 5L. Can I claim full interest deduction on this loan (My confusion is that ewe can claim second home loan benefit only if we have loans on both houses or even if loan is only on one house but person has two houses). I have read about rent and standard deduction before calculation interest benefit but not clear on actual definition of second home loan.
Hi,
My wife bought a house applying for loan completely on her name. Now she had resigned and not earning and I am completely paying this loan.
Please let me know how can i avail tax benefits, do i need take any declaration.
If Yes, how?
Thank you
Hi,
I am buying a ready to move in flat from a builder, I plan to make complete payment to builder and he will issue “No dues” and “Possession letter” for the flat but I will do registration (sale deed) of flat 6 months later.
Interest benefit can be claimed from the time ‘When construction is completed’ so in this case the construction is completed, all payments are made and i will also have ‘Possession letter’ for the flat but no registration (sale deed).
1. Will this qualify for home loan Interest rebate?
2. Is Sale Deed (Registration) is must or ‘Possession Letter’ from builder is sufficient to start claiming Interest rebate?
Can I take advantage of tax benefits from a plot purchase & house construction loan (I will start constructing the house after one year). Now my EMI started.