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)
Sir pls give me a rply as soon as possible…..
Sir,
my client purchased a flat of Rs.515000 as per deed and want to sale old flat . he taken loan for new house Rs.435000 and Rs.80000 is from his capital. The Capital Gain is around Rs. 3-4 lacs.
Now my problem is that can my client get exempt the capital gain by sold old flat against loan that he taken if he not repaid it in this year?
How much can he made a deed of old house to sale that he can get whole capital gain exempt?
Is there any dispute if old house which is small has a more deed value that of new house purchased by him?
Hi, I took a housing loan for which i am currently claiming tax benifits for both deduction towards principal amount and intrest. I am also residing in the same property. What tax benifits cam I claim after repaying all the loan
Hi, I took a housing loan for which i am currently claiming tax benifits for both deduction towards principal amount and intrest. I am also residing in the same property. What tax benifits cam I claim after repaying all the loan
I purchased a home through SBI Home Loan
I am paying my installment regularly which statement produced to employer for the tax deduction and adjustment of interest but my employer denied for the deduction of interest as well as 80C because of I have taken loan from outside while I have given all the information to the employer for the same.
Due to this my Rs 20,000 approx. will go with Income Tax department and it will be return after filling the Income Tax Return and finally will be return after july2012, while my last years return yet not received.
I want to know does my employer not doing injustice with me and other like me people.
Pls suggest to overcome this issue.
Hi, Me and my husband having a joint housing loan, for income tax benefit both of us can avail income tax exemption for interest of Rs.150000 individually, or the exemption will be only Rs.150000 and both of us have to share it? Please provide proper evidence from The Income Tax Act, as our HR is not convinced.
hi – Can i claim any deduction during the period of my EMI payments but possession of property is still not in my hands
Hi
I have just signed up a housing loan in Nov-11 and the EMI will start from Dec-11. And this property is under construction and will be completed only by Apr-12.
In this scenario, can I claim IT benefits for the interest and Principal portion which I will be paying upto Mar-12. If yes do i need to show them differently when I file my returns, since I also claim HRA from my employer currently.
Can u pls Advice.
Hi,
My husband took a house and I was the coborrower(surity). Now we got divorced legally and I am not asking any share in house. Since my name is present in loan as Co-borrower, what is the procedure to get it released?
Rgds,
Dikshit
i think deduction under section 80c and allowability of interset will be available to the person who pays the money.
Hi,
I am based out of Mumbai and I have a running loan for my first property in Hyderabad which my parents are presently staying. I am planning to buy a new property in Mumbai for self occupancy. tell me the tax treatment of the same with respect to tax deductability and HRA rebate. Given I am a salaried employee.
Can we get benefitr for paying Housing loan which is in the fathers name???????/
Can we get the TX benifit on paying EMI on Home Loan which is in my Fathers Name & he is a farmer.
Also can we get tax benifit on paying EMI on Education Loan which is on my younger brother name.
If not what is the way to get the benifit.
Thanks in advance.
Biswajit Nath
Sir, I have purchased a Home for 19 Lakhs out of which 14.25Lakhs is loan from nationalized bank My yearly income tax is around 45thousand how much i can save monthly EMI 15000
I have taken house building loan in 2003 and getting tax benefit(rebate) of the same. Now I want to take loan to extend/construct one more floor on it. Am I eligible to get tax rebate on new loan also on the same property?If not what is the way to get tax benefit on new loan also?
Iam government employee and my wife is also govt.emoloyee.Both we have taken a loan from HDFC. can we take the benefit of income tax both seperately. for example principal benefit upto rs.150000 and interestpaid rs.90000 for the year.How can we both claim the benefit for the purpose of income tax. we both have the emi.
i have taken house building loan in may 2006 on which i am getting income tax rebate.
in 2009 i have taken another housing loan on same property for extension and renovation. shall i get income tax rebate under section 24 and 80cc on another housing loan on same property?
Hi ,
I have taken a home loan on my name only ….. since the loan has started i left my job on medical grounds and have not taken another yet …. but my wife pays the emi’s for the same but the loan is only on my name willl my wife get the benefit of tax .
REQUEST YOU TO PLZ HELP ME WITH A SOLUTION FOR THIS .
Can I claim IT rebate u/s 80c for paying premium of Rs 16328 towards Property insurance for HBL taken from SBI?
I & my wife have taken a Jt. HB loan of Rs 28lacs from SBI at Pune in May 2011. Registration of the unbuilt flat is already done. SBI has already disbursed 75% to the builder for the construction. The possession will be in Dec 2012. Can we claim relief u/s 80c on shared basis for only INTEREST paid every month to SBI?
Can we claim 80C this year for the current year instead of 24b in next 5yrs after possession.
We both wife and me working as govt employee (Haryana & Punjab). Presently, we are living parental house. I have booked a flat in the name of my wife, 25% amount has been given and want to finance 75% (ie. 13 lacs) from the bank. Please inform me that both are eligible for tax exemption of the EMI paid, if yes, then in which ratio.
Dinesh Kumar
Dear Sir,
House site is in my wife’s name. I have taken housing loan from bank and constructed house where my wife is also co-applicant for loan amount. My wife is not working. Can I get tax exemption.
I am a defence officer and I am staying in govt house at the places of my postings. I have availed two Home loans for two different house properties. Please tell my eligibility for home loan interest rebate under section 24.
Hello,
I have taken a house loan through private bank. The completion of the house construction is planned for Jul’12. However I have been paying EMI (not pre-emi) for last 2 years. I am not able to claim tax benifit on it. Any advice on it to claim this year for the interest amount would be helpful.
I took personal loan for construction of house for my parents. Can i get some tax relief for personal emi i am paying.
Dear Sir,
My wife is Housewife. I have purchased a Piece of Land In her name from My own Fund.I have constructed one building on the said plot taking A loan From A Nationalised Bank.I took possession of the house in the year 2001.Loan availed was also in the Same year 2001.I had passed several Assesments since that period . Now A New ITO is disallowing the Interests Claimed saying that ” your are not the owner of the Property.”Hence Housing Loan Interest deductions are not allowable to you.He is also threating to reopen all previous assesments .I am paying all the EMIs from my own income.The entire house has been constructed from my own income.
Am I now Eligible to get deductions for housing Loan Interests or not?
Please suggest me what I can do at Present?
sir,
I had purchased a house with my wife as co-applicant two years back on loan after two years also I am shocked to see that only a few thousand rupees of payment had gone to the principle component rest all has gone to the interest account and my emi is also increased from 11000 to 12599 which is too much at the time of raising the term n emi amount banks raise it instantly than y they don’t decrease it as the rates go down.my request is that RBI should take it very seriously as this is for public benefite.can i pay pay my increased amount by chk as i don’t want to touch the already going emi of rs 11000 by ecs.how much amount can b paid in a year out of my principal balance amount.
thanks & regards
parag joshi
Dear Sir,
I have been seeing like this article wherein every one mentiones that each of the co-owner can claim benefit u/s 24 to a maximum of Rs.1,50,000. I have also done this. But now I have assessment proceedings(for the year 2008-09), where in the AO says, the total amount of Interest claimed by husband and wife, cannot exceed Rs.1,50,000. i.e. the limit is not individual but composit (combined) and he is ready to allow only Rs.75,000 to each of us even though the actual interest paid is much higher. Please note that the property as well as loan is jointly owned. Need urgetly your help in some material or reasoning/basis on which I can say (you are also saying in your article) that both of us can claim Rs.150,000 (each)individually.
Thanks in advance
Sivakumar.K
dear sir, I hv booked flat 2 years back and started paying Bank EMIs reguaraly. I will get possession in the next months. Let me know How can I claim my paid EMIs for Income tax purpose
I purchased a house in the name of my wife and taken a loan in which she is co- borrower. I pay the full EMI. What I can claim exemption of interest and loan repayment?
I live in India and my brother lives abroad. We want to buy a house in India under a joint ownership. My brother will pay for his share from his savings. For my share, I want to take loan from a bank. Pls. advise if the Banks will give me the required loan in such a joint ownership and will I be eligible for Tax Benifits.
thanks.
i purchese house with the joint name with my Mother, my mother have Govt. job. so EMI pay from my mother saving account. i have question that can i take tax benefit.
I have taken a home loan jointly with my wife. property also registered in joint names. My wife is not earning. Shall I get total tax benifites.
Please clarify. Thanks in advance.
sir i borrowed home loan from my friend and interest paid up yearly.can i interest claim u/s 24 as in limit 150000.pl reply on my mail address
yes it can be claimed
sir i borrowed home loan from my friend and interest paying yearly.can i interest amount claim u/s 24 in limit 150000 pl reply
Suppose I have a home loan in joint name (with my wife) and she is paying EMIs. But she don’t want to take IT benefits and I would like to have 100% tax benefit (as her income is within the IT limit). How can we do this ?
Hi!
We had booked a flat in the joint name of my mother and myself. We had applyed for housing loan from a nationalised bank (UCO Bank).Now they putted a clause that for loan my sister also have to sign the documents and give the NOC.
Thus I want to know that is there any rules for housing loan under this case.
Hi Sir,
I am not a co-owner of the house, but co-borrower of home loan. I am also paying some amount whenever I have surplus amount. Can I claim income tax exemption on interest under section 24?
Sir my uncle has taken loan on house which is in name of his mother an dloan have jiontly taken on name of uncle anuty and their mother can my uncle get Principal amount rebate u/s 80C and Interest recate can be take or not As my uncle is salaried Employee in videcon Can he avail the REof Interest and Pricipal Amount
Sir my uncle has taken loan on house which is in name of his mother an dloan have jiontly taken on name of uncle anuty and their mother can my uncle get Principal amount rebate u/s 80C and Interest recate can be take or not As my uncle is salaried Employee in videcon Can he avail the REof Interest and Pricipal Amount
I have taken a joint home loan in my wife & myself name & paying EMI’s since last one year. I am staying in a rented house.Can I get the tax rebate on my Home Loan if yet not got the possession & still staying in rented house.
I am planning to take a home loan to construct a house ona plot. I have two queries:-
(a) The plot is on my wife’s name, can i get a home loan for constructing a house on the plot.
(b) In case i get a loan, will i get tax benifits for the EMI payments for the repayments of the loan.
I am planning to take a homeloan to construct a house ona plot. I have two queries:-
(a)
Dear Sir
We had purchased a falt in Pune. Me and my wife is co-onwer where shares of each is not been mentioned in the agreement. However my wife is housewife and has no income source. All the EMI gets deducted from my sole salary.
Am I eligible to get 100 % tax benefit in this case i.e. Principal upto 1 Lacs and Interest upto 1.5 lacs from my salary.
Please advice. Also please guide if any written law or notifications in this respect is available.
Waiting you early reply.
Thanks in advance
Gurudatt Kulkarni
I have taken a Home Loan on my father name. 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
Me and my husband have selected a property in Kolkata.We have self occupied property in Mumbai.This is a resale underconstruction property tobe purchased as second property not to be rented.How much joint loan shud we take to maximise the tax benefit for interest exemption under IT Act..
Thanks for your reply..
If both husband and wife employees have availed housing loan from same bank within single loan case for single self occupied house, whether interest deduction under sec.24 of I.T.Act upto Rs.1,50,000 each separately for both irrespective of fact that total of such deduction under single loan case for self occupied house exceeding the limit of Rs. 1,50,000/-. Being a DDO your esteemed guidance is solicited.
ours is a joint family in surat. my job is in mehsana. I want to perchase home in surat and want to avail home loan in surat. Can I get home loan tax rebate?
Sir,
I n my wife both had taken jointly home loan, n for the financial year 2010-11 I had only paid all EMIs to bank from my indiviual salary a/c, in that case how much intrest on home loan and capital payment of home loan benif I can claim ?
and please specity under which Income tax head I can claim.
Becuase I had applied ful intrest benifit on my name for this F.Y. but my owner is not accepting that I can claim ful intrest benifit. He is ready to give only 50% benifit to me. So, what I will produced against him so that he will give full benifit (if I can claimbed)
Hi, I have purchade a home in the name of my Wife (House Wife) and EMI paid by me.
Can i get the Tax benifit againt the same.
Regards,
Virendra