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)
I have flat on loan and taking tax benefit for interest paid by me, now I want to sell it and planning to purchase new flat at higher cost. will I get tax benefit on this new flat?
sir,
I want to purchase newly constructing home in my wife`s name who is home maker as a co applicant i repaying entire loan amount, pl tell me whether i eligible for 100 percent income tax rebate benefit.
Sir,
Me and my wife have taken home loan(jointly)of rs.4500000/-.We both are employee.There are two loan a/c ie.rs.2500000 and rs.2000000.Emi for rs.2500000 paid by my wife and Emi for rs.2000000 paib by me.And home is registered on my wife`s name.Can we both claim tax benefits for this loan.Please tell me all options. THANKS………….
Sir,
I and my wife are co- owners and co- applicants of loan.
But we have not specified any split of share as co- owners.
My wife does not fall under tax bracket.
Hence I am paying 100% loan amount from my bank account which not shared by my wife.
My wife does not claim tax benefit.
Could I claim 100% tax benefit in my name?
sir,
i have a house registered in the name of my spouse.
we are taken home loan jointly, wife is non-working and myself a govt. servant.
do i get income tax benefit,if yes, under which section.
Sir
We have purchased a home on my father name and have taken home loan from where I am lso Co-applicant in it Can I get also Income tax Exemption.
I have taken a housing loan of Rs. 8.50 Lacs in 2009 to purchase a flat and I have also taken a Top Up loan of Rs. 2.60 Lacs in 2015 against the same loan for renovation of that flat. Should I get benefit of housing loan for both.
sir,
i taken a loan from patpethi when i bye home. loan like mortgage loan because we give our home and shop agreement to pathpethi as mortgage. I i take deduction from income of interest of same loan.
sir,
i have a house registered in the name of my spouse.
we are applying for the home loan jointly, wife is non-working and myself a govt. servant.
do i get any sort of income tax benefit,if yes, under which section.
tax benefit on home loan from Father–
I took loan from my Father for purchasing a home, which repaid to my father with intrest, can I get benefit on Income tax and under which section.
I have taken home loan in October 2010 to buy a Builder Flat. Builder give me possession in Feb 2015. Is there any capping of number of years of taking possession from the taking of Home loan date to claim Rs. 2,00,000 on interest paid under section 24 B. As my employer if possession is given after 3 FY I am eligible for Interest Claim of Rs. 30000/- only not Rs. 200000/-. Is it correct.
Mob. 09412220058
Deductions are based on income, correct? Section 24 outlines no limit on deductions for interest paid on home loan. How can one claim more interest deductions(e.g. Rs.75,000) than rent income(e.g. Rs. 15,000) from the property?
D/a
I have purchased falt at gaziabad, The total interest paid by me in last fy was rs 5.50 Lakh. The flat is rented with total Yr rent of Rs1.80Lakh.Please suggest how much tax benefit on interest can I claim.. Is it Rs1.50 Lakh only or entire interest amount.
Hello there..
Can one claim deductions more than their income?
The IT act of 1961 terms income from property based on annual value received (mostly) in terms of rent. While this may be 10K/month, the interest on the loan taken for the said property in most cases will be higher than the rent, for e.g. 50K/month. Can the entire interest of 50K be claimed even if there isn’t an income from the property that is over the deduction being claimed?
Also, does the below statement from sec. 24 override the no cap on interest(based on 24 b.) amount and effectively cap the deduction to 30K when an individual is not able to occupy the property based on work location being different than the property location?
“Provided that in respect of property referred to in sub-section (2) of section 23, the amount of deduction shall not exceed thirty thousand rupees”
i have purchased 2 to build house and availed housing loan from different banks. The first one is in my name, while the second one is in me and my brother’s joint name(Property as well as loan). The first loan was in year 1998 at staff rate as I am bank staff and second one was in 2012 availed from other bank at public rate. So how much rebate I can avail and on which loan-both or one?
Hi Sir,
I have taken home loan in year-2011 for a property which was under construction at that time. It was completed in Year-2014 & I have taken possession of it now. Though I have claimed Interest/Principle for loan for this year14-15 in my ITR. I need to know if I can claim the interest that I paid on loan before the possession & what is the procedure for it.
Regards
JS
Dear sir,
II have taken a housing loan. My wife is prime applicant and I am co-applicant.. 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? My house is on my wife’s name. Kindly help me.
Regards
Shajan S
Dear sir,
I have taken a housing loan. My wife is prime applicant and I am co-applicant.. 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? My house is on my wife’s name. Kindly help me.
Regards
Shajan
sir,
me n my wife have purchased a home, .home loan is taken by the names of both of us, but I alone is paying EMI.we both r working, can be both get the tax rebate ?? n what will be the maximum rebate for us??
I have purchased a house for residential purpose jointly with my wife. We have declared that we share the tax benefits on a 50:50 basis. Now the CA at my office gives me a tax exemption on interest part for only rs.1.0 lac; while my total interest part per annum is more than 4 lacs. When I told him both of us are eligible for an exemption of interest part upto 2.0 lacs, he asks me to show the Income Tax rule. can any one provide me with a link to any such official document to subtantiate my claim with the CA. He rubbishes the posts that i showed him from chartered club and so on.
please help.
Sir
I have already taken loan in 2009 and have cleared entire amount in 2014 for which i have claimed rebate. If i take another loan for a new property am i eligible once again to claim rebate please advice
House Owned – Father
House Loan Applicant – Father & Son
Loan Repayment – Son (Fully)
Deduction u/s 24 cannot be allowed as he not the owner of the house.
But can he claim deduction for Housing Loan Principal Repayment u/s 80C.
SIR,
We have a very peculiar set of inquiry, hope you will guide us thro’. We have taken home loan of 24 lacs in Jan 2013, followed by Home equity loan in feb 2015, both from Sbi in the name of my father, mother and self on the basis of property registered in our names in the ratio of 2:1:1 resp.
My father expired a couple week back and now we dont have idea how to tkae tax benefits under various sections. We have till now credited EMI directly into our loan account
the questions that are puzzling us are
1.Since i am going to inherit all business liabilities, can i claim benefit to his share of deductions in loan amount paid
2.He has also taken varid health adn accidental policies in his name, can i claim deduction for the same, if yes under which section
3.if i can claim deduction under section 80C and 24 B , than in what share me and my mother can split the amount to claim max. tax benefit
looking forward to your reply a.s.a.p
Sir,
I had availed a housing loan of Rs4.00 lac in 2004.And another loan of Rs.20.00 lac in 2012 for another property in same city(possesion of 2nd house yet not taken)As loan installment of 2nd house is much higher,can I get repayment benifit of 2nd loan to get tax benifit?
I have taken home loan 25 lakhs for the first time in the financial year 2013-14 for purchasing a flat in my home town. It was ready for occupation by April- May 2014. My Question is how much interest amount on the home loan can I claim deduction in case the flat is meant for rental and is unoccupied through-out the period for 2014-15.
sir,
can i claim tax benefits for home loan repayment i a m co-borrower .the property is in my wife s name but i am paying the full emi.she is not an salaried. is it not strange that the loan is given with on my salary certificate but i cannot claim the tax benefits ??is there is any recourse.
I am the co borrower of a housing loan along with my father. entire repayment of loan and interest is paid by me as my father does not have sufficient income to repay. can I claim exemptions for interest/ instalment although I am not the owner/co owner of the house.
Respected Sir,
My query is regarding the allowability of deduction u/s 80C for the loan taken by my wife and my son, for the house which is owned by my wife and my daughter in law. i am paying the loan amount in total, my question in this is:
1. Whether i am eligible for claimimg deduction U/s 80C.
2. Whether i am eligible for claimimg deduction u/s 24(b) for interest paid by me.
no other person (wife, son, daughter in law) is claiming any deduction u/s 80c and 24(b).
Kindly answer this query As soon as possible because i have to file my return of income before 12.03.2015. I shall be highly obliged.
I have purchased two properties in two locations. 1st One in 2012 and another in 2014.
For both I am paying Home loan EMI. I am staying in neither of the flats. Can I claim IT benefit for both the loans?
Dear Sir,
I was sanctioned house loan in Sept.2010. First installment was drawn in Oct.2010. Last installment was drawn in Nov.2012.House is likely to be completed in March 2015. If I take possession of the house in March 2015, will I get tax deduction benefit of Rs.200000/- for AY 2015-16 as my tax liability on home loan for FY 2014-15 is more than Rs.200000/-? More-over, will I get tax deduction on interest already paid on my home loan before the construction of the house?
I have bought a house in July 2014 for which I have taken a loan of 3750000. The construction is completed & I shall got the possession of my flat in March 2015. Can I avail the benefits of interest on home loan for current FY 2014-15. Please suggest how to avail the tax benefits.
Dear sir,This is jitendra. I have booked a flat at g.noida & possession of the flat shall be on 2017.then Jan 2014 to Jan’17 we can avail tax benefit under sec 24 n 80c or not.plzzz replye..
I have taken top up loan on the existing residential home for up gradation of existing house. Can I claim The interest and principal deducted from this loan for income deductions. Pl. advise. Thanks
Sir,
I am working in Govt. Institution.My husband is a businessman.We have taken home loan.I am the co-applicant.In the past years my husband was paying the bank interest. But In this FY , i am only who is giving the interest.Can I get the full benefit under section 24 and 80 C. Beside this I have taken another home loan for other property which is under construction. Can I take the tax benefit under section 24 and 80 C also.
Mamta Lambert
Sir,
I am working in Govt. Institution.My husband is a businessman.We have taken home loan.I am the co-applicant.In the past years my husband was paying the bank interest. But In this FY , i am only who is giving the interest.Can I get the full benefit under section 24 and 80 C. Beside this I have taken another home loan for other property which is under construction. Can I take the tax benefit under section 24 and 80 C also.
Mamta Lambert
Hi Sir
I have taken a flat and it is under construction. Builder says in the month of March 2015 the possession would be provided with completion certificate. Considering that, how can i avail tax benefit?
Regards
Amar Narkhede
Recently under some special scheme, Builder has agreed to pay interest on my housing loan till the possesion is recievd . After possesion my emi will start and i will pay interest. Can i claim i tax benefit under 24 b for interest paid by builder directly to the bank.
Dear Sir,
I booked a house for construction in Feb 2010 & took a loan for it from Bank. The last loan instalment was taken in Jan 2015 before possession of the house. I have taken possession in Feb 2015. My query is
Will I get deduction on home loan interest from this FY on current interest & Past accumulated interest?
Dear sir,
I took joint home loan with my wife. Although only my wife is owner of that home. Home loan EMI is 22000 Rs/month. Can we both can get rebate in income tax? we both are government servants. How much total rebate we can get?
With best reagrds,
Jitendra Kumar Khinwal
09413392563
khinwaljitu123@gmail.com
Sir, I took loan in Nov. 2010. My house is completed in February 2015. When I submitted for tax rebate under sec 24, it was mentioned that since house was completed after the specified period of 3 years, the max. rebate I can get for interest is only 30,000 per year. Is it correct pl. indicate….
SIR, I am co-borrower of home loan with my wife as borrower. I am not availing the loan for my Income tax return. I produced a letter from my account officer to this effect. The loan is recovered from my salary account from the bank for which standing instruction was given. Can i allow my wife to avail total benefit of the loan. I am not a co owner of the property. my wife is the only owner of the property. Kindly clarify. My wife is working in state govt office and her take home salary is less than the emi itself.
respected sir,
I have taken home lone from icici HFC on June 2014. In February 2015 I have paid some outstanding money as a part payment.
I want to know that under section 80c can i include this part payment.
regards.
SIR,
IAM THE OWNER OF THE PROPERTY BUT MY WIFE IS A JOINT HOLDER FOR THE HOUSING LOAN I HAVE TAKEN .CAN WE BOTH AVAIL THE HOUSING LOAN INTEREST AND PRINCIPAL FOR INCOME TAX DEDUCTION. IF SO INTEREST AMOUNT TO WHAT EXTENT ? BOTH OF US ARE WORKING
can we take benefit of housing loan issued by teacher credited society
Dear Team,
I have two properties in joint name along with My spouse. But I would only like to tax benefit against the both the properties. Out of which one is self occupied and the other is under loss of let out property.
what is that I need to submit as proof is it just the declaration from My spouse or anything else?
Dear Sir,
1. My mother had bought a residential plot for constructing a house. however she now is constructing six flats on the same plot.
2. She wants to give one of the flat to me as inheritance during her life time and wants the balance property to be given to my two brothers later.
3. However as she did not have sufficient funds I and my husband have given here 30 lakhs which is sufficient for construction of one flat only.
4. In order to raise this money my husband has taken loan from PF being a central govt employee.
(A) Can we register this property as inheritance with my husband as co-owner.
(B) Can my husband get the tax benefit.
(C) How much Stamp and registration shall be required to be
paid
(D) Would it be processed as inheritance or gift or a sale
deed will have to be made in name of my husband.
(E) How many percent registration charges will be required
to be paid for processing it as
(i) Inheritance
(ii) Gift
(iii) Sale deed
Regards
i bought house in july 2010 , i get completion on aug14; my bank interest for FY 10-11,11-12,12-13,13-14 was 50000; for FY 2014-15 is 65000; how much rebate , i will get
I have taken two loans. One is house purchase in 2002 second one is Home improvement/renovation loan in8/2014. My doubt is Repayment of these two loans are eligible for exemption under Income Tax priciple and interest
Sir,
I have taken home loan from nationalised bank amounting Rs12 lakh and and EMI is deducted from November 2014 can i get taxbenefit this year income
I am told that unless you get posse4ssion i will not get any benefit in income tax
Isit necessary to get possession befor getting benfits
construction is going on on booked flat
pl advise
I bought a house for which emi is deducted since aug-14, but not occupied till mar-15, may i claim for loss from house propery from aug-14 to mar-15 as well as hra exemption for apr-14 to mar-15?