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)
Dear Sir,
My wife and myself purchased a home on 2009. We both are the co-owner as well as the co-borrower of this property. Since then we are taking the tax benefit of this with 50% share basis. Now we are planning to purchase another home where we both will be the co-owner as well as the co-borrower.
Are we eligible for getting the tax benefit of the 2nd property along with the 1st property at the same time?
If my wife is co-applicant of the 1st property and if she pay the entire sum of the 1st property and I pay the entire repayment ( EMI ) of the 2nd property where I am the co-applicant ( But we both are the borrower of both the properties), is she eligible of getting the entire tax benefit of the 1st property and myself for the 2nd property?
Thanks,
Debojit Nag
I have taken a home loan on joint name with my wife.This was done on recommandation of bank.However my wife is house wife.Unfortunately My company Tax computation gives me rebate on 50% of intrest amount paid (Total intrest component is 2.5 lacs) only that is 1.25 lacs of intrest paid .However my rebate limit is 1.5 lacs as per sec 24.I do not know what to do .Pl some one guide on this
sir i have a house outside india on which i paid my housing loan installment regularly but i am a salaried employee and working in india so can i claim a housing loan repayment deduction under section 80c.
house building advance taken in 2001 for rs. 700000 with monthly deduction of rs. 5000. claimed incometax deduction for principal and accrued interest during the period 2001-2011as per provisions.. during the FY 2011-12, outstanding amount of advance and interest paid in full. whether the entire amount of principal and interest paid are eligible for deduction under section 80c and 24 respectively ?
My brother has taken a housing loan from LIC housing jointly with his wife. His wife is house hold lady with no earning. The house purchased is registered in the name of his wife only. My brother wanted to know whether he can avail deductions permissible for payments of principle and interest amount for payment of his income tax.
sir,
what is the tax benifit on house loan,can i save tax from both principal valur & interest value of loan,apart from this can i also do investment like LIC & PPF.
wHAT IS THE MAXIMUM AMOUNT THAT I CAN SAVE FROM TAX.
Sir,
Suppose I book a flat jointly with my mother(not a tax payer)& I alone take a home loan in my name, will I be eligible for tax benefits.( I will be paying the EMI against the home loan)
Sir, Me & my father jointly own a flat. He is a co-owner but NOT the co-borrower. I had paid the EMI’s & took the INCOME TAX benefit on that.
Now, I want to rent out that flat, so is it ok that if I make rent agreement on the name of my Father & tenant. OR is it necessary to make agreement on my name only. B’cos I want to avoid paying tax on high rental income.
Pls. guide on the same. Thanks.
Sir, I have a flat and availed Rs.10.50 lakh loan from a Bank and is aviling the benefit of tax benefit under Sec 80C and Sec 24 of IT Act. I have purchased one more flat in another city and has availed a loan of Rs.18.72 lakh from HDFC. Am I eligible for the tax benefits for the 2nd flat. If so under what sections? Kindly clarify.
Sir , I am doing job in mumbai and stay in rented house & took a Home Loan for built house in jabalpur can I take exemption both HRA & Home Loan
I have been allotted a Type C quarter costing Rs. 34.37 Lakhs in Mohali by Central Government Employees Welfare Housing Organization. I have taken a home loan from State Bank of India for Rs. 25 Lakhs. I have paid 1st instalment of Rs. 10 Lakhs to the Housing society. Rest of the money I have to pay in 5 instalments. The complete Type C quarters are expected to be completed in the year 2015.
Sir Am I eligible to apply for a Home loan Tax rebate in the interest (Max upto Rs. 1.5 Lakhs) and principal (Max Upto 1 lakhs) under section 80C even though the house will be in my possession in the year 2015. Please suggest.
Thanks and regards
Sachin
I have taken a house loan from HDFC bank and myself and my father bother are co-owner for teh loan and house also registered on name of both of us. But I pay complete EMI from my bank A/C. Can I get complete Rs150000/- benefit for the housing loan interest. Please let me know.
Sir, I have taken a Loan from Bank on both name me and my Wife and i am owner and wife is co-Owner of property but total Emi paying though my Salary bank account and wife’s Salary using for house hold exps. please help me to sort out my problem that who will claim the deduction u/s 24 and 80C because she is coming under taxable Income . please tell me way to avoid this situation
Thank you
Satish
respected sir,
i have purchased a car on loan from megma financial pvt ltd ( a private finance company) . my loan is for the period of 5 years. my emi is 3425 rs per month. plz sir, tell me can i get rebate on this loan from income tax.. tell me about whole things…
with respect
manpreet singh
9914400388
Dear Sir,
I want to know that if i m living in rented house and i hv also a own house on which i have taken housing loan. for taken tax benefit of interest & principal component, it is necessary to show rented income from loan property? If yes, then how much will be minimum?
Dear Sir,
I want to know that if i m living in rented house and i hv also a own house on which i have taken housing loan. for taken tax benefit of interest & principal component, it is necessary to show rented income from loan property?
Dear Sir,
I m atul, one of my freind(salary person), he took a housing loan and he letout it on rent and he live on rented house. His interest component is rs. 260168/- for the period 01.04.11 to 31.03.12 and he pay rent 30000/- per month and he receive rent Rs.3000/- per month on loan property.
So, plz tell how much amt tax free & how?
My wife working in army she took HBA Loan in 2001 amount Rs 190000 e,so for she did not claim income tax refund for HBA loan , principal amount recovery monthly Rs 2000/ completed , interest recovery is going on,whether can I claim the refund now for these period, Every year IT Returns submitted, but few copies of IT Return filed available to me , kindly reply me
i have take a house maintanace loan taken from a registred co-operative socity .repayment amount havebe tax deduction or not ? PLEASE REPLY SOON…ITS URGENT
i have take a house maintanace loan taken from a registed socity .repayment amount havebe tax deduction or not ? PLEASE REPLY SOON…ITS URGENT
Dear Sir,
I Arvind Hatkar and my wife Archana Hatkar both are salaried. We have taken home Loan in Aug 2006. Arvind is Main Borrower (Main Applicant) and Archana is Co-borrower (Co-Applicant). From 2006 to 2011 Me Arvind has taken tax benefit (100% of interest component & principle component) of home loan. Now when the principle component is increased beyond 1 Lac, Someone said me that you both (Arvind and Archana) can take 50%-50% advantage of interest component and principle component of my house loan repayment.
On the other side again someone said that since you have taken 100% tax benefit from 2006 to 2011, now you cannot change it.
Sir, I would like to clarify this. Let me know now can we take 50%-50% advantage of interest component and principle component of my house loan repayment.
Please reply me.
I have taken loan for repairing my house & my principal Amount is Rs 165021 & Interest is Rs 310520. So how much i can claim for tax benifit ?
Please reply
Thankin advance………..
my hbl with my wife (co owner)who is a house wife.may i take the total rebate from the EMI?
I HAVE TAKEN LOAN OF 2 LAC RUPEES FROM MY FRIEND FOR PURCHASING A HOUSE.WILL THIS AMOUNT BE TAXABLE FOR ME OR NOT?
PLEASE REPLY SOON…ITS URGENT…
Dear Sir,
My wife and I availed Loan from Bank for housing purpose. My wife is repaying the Loan fully and wants to take benefit of Tax. I am ready to give the declaratin to the same. My wife is serving in RBI. Wife employer demanding a letter from husband employer that husband is not claiming the same. Husbund employer is refusing to give the same.Please guide me regarding legal practice so that I can avail benefit
Sanjeev Dhavan
Dear Sir,
I have taken home loan for a under construction flat & paying the pre EMI(intrest) + Principal. I am currently living in same flat where my portion is complete & 4th floor & the Penthouse construction is still ongoing. Am I eligible to claim the tax weiver on home loan interest for the same financial year. Pls clarify.
Sir,
I have taken a housing loan which is in joint names of mine and my wife. My wife is also a working lady. The house property is also in joint names. The EMI is being paid totally out of wife’s salary account due to operational convenience and household expenses are being met totally out of my account and there is an understanding to this effect between us. Can I claim benefit of tax under Section 24 & 80C for the whole amount of interest & principal. Please clarify
Hi sir,
I am earning 10L per annum and I am planning to take a House Loan.My question is House loan intrest paid is 150000 and source amount is 100000.so the intreast paid on my House loan will come under which slab like 30%,20% or 10%.
Thanks & Regards,
Murti
I have 2 home loans and the instalment i pay is Rs. 8843 & 4939 respectively, can i get tax benefit under under 80c.
sir, a residential plot is allotted to me in aerocity mohali, for which i took homeloan from punjab and sind bank in may 2011, but the possession of plot is not given till date, it may be given in next 2 or 3 years, my query is can i avail the tax benefit on interest and principal paid to bank under home loan from this financial year.
sir, a residential plot is allotted to me in aerocity mohali, for which i took homeloan from punjab and sind bank in may 2011, but the possession of plot is not given till date, it may be given in next 2 or 3 years, my query is can i avail the tax benefit on interest and principal paid to bank under home loan from this financial year. what tax benefits i can avail since i took h/l.
Sir,
I have purchased a flat. Where i have made cheque payment of Rs. 4 lacs and for rest of payments- I am taking home loan. I am planning to make sale deed & loan procedure in beginning of next financial year (2012-13).
Can I take tax benifit on initial cheque payment to builder (4 lacs) as investment under 80C, or any other section..
I have taken home loan but my income was low so bank add my brother as coborrower, All the EMI is paid by my account and I want to avail 100% tax benefit and my brother does not take any tax benefit from this loan. how can I take 100% benefit from this loan? what should I do?
The details mentioned in Q2 above regarding joined loan is wrong. Please refer to the following link from incometax dept site FAQ
incometaxindia.gov.in/questionbank.htm#G94
I have taken composite loan & the bank has disbursed 50% of the loan towards site purchase.
Now there is a limitation on my side to start construction & hence i may not be in a position to lay foundation within 9 months. I would like to understand what action will be taken by the bank?
Does it get convereted to site loan with addtional rate of interest? Please clarify.
If i buy a property on loan and rent it to my parents and I stay in another house owned by my parents and pay rent to them, am I eligible for tax exemption on loan(principle+ full Interest amount) and HRA tax benefits also.
I bought a house in Mar 2007 at 14.5 Lacks and Took a Renovation loan of 3.5 Lacks in Mar 2009 and Finally Sold it in July 2011 at 21.5 Lacks.
Now I have few Queries:
a) Can I claim the principle and interest for 4 months period of Apr 11-Jul 11 ? As I paid 75K as Interest and 17 Lacks as principle but I do not hve possesion till Mar-12 Finanacial Year end.
b) Do I have to return the benifits under section 24 taken in last 4 years having made Long Term Capital Loss on the peoperty ?
Thanks in Advance !!
-Gaurav
Sir, I have purchased a house in Delhi jointly with my wife. Both of us are Govt. servants. We have taken a joint loan from HDFC of Rs.24 lakh. The house at present has been let out on rent and the annual rent received is Rs.1,20,000/-. On this loan, the interest component being paid by us during this year is Rs. 2.93 lakh. Can we both claim tax benefit on interest. Can we claim rebate of Rs.1.5 lakh each or shall we claim Rs.1,46,500/- (half of Rs.2.93 lakh) each. How will we show the rent received. Shall we both show Rs.1,20,000/- as rent received (income from house property) in our return or shall we show Rs.60,000/- (half of Rs.1,20,000/-) as rent received in each case. Kindly also inform what are the sections under which we can claim these benefits and what are the evenidence s( copies of IT Act) which can be furnished in office for claiming this benefit.
Sir,
I have puchased a plot for house construction, proposed to construct in next year ie during Feb 2013 and i have paid interest around Rs.95,000 & Princ – Rs.18,000 can i avail tax rebate for this financial year 2011-12. I have got composite loan sanctioned for Rs.25,00,000, at present i have availed 12,00,000 and planned to avail the remaining during the construction time. Please advice me how can i avail tax benefit.
Sir,
I have purchased a flat. Where i have made cheque payment of Rs. 2.5 lacs and for rest of payments- taken home loan. Since i do not have possesion of the flat, bank is charging only interest component of home loan as EMI.
I under stand that on Interest component i can take tax banifit. But can i take tax banifit on initial cheque payment to builder (2.5 lacs) as investment under 80C, or any other section..
i have taken home loan this year in july and going take possession in february. what about HRA exemption and hoam loan interest benefit, i will take both or only home loan benefit because that will end of financial year i was in rented house whole year, please h
I have purchased a Plot, with the help of loan form SBI. can be get home loan tax advantage during the FY.
currently the said plot is land only, still construction not started.
Regards
Raman Sharma
I have taken two home loans & both are let out currently and i am staying in an rented property (40kms away from the owned property). In this case will i be eligible for deducting Prinicpal, interest (for both home loans) & HRA benefits? I am receiving rent from both the properties. Pls advise.
my brother and his wife has taken HL jointly. Bt the property is in the name of his wife. bt whole EMI is being paid from the account of my brother. his wife is also employed and wnts tax relief. whethr his wife being a co-borrower and fullowner of the property bt nt paying EMI can claim tax relief. if so please let me knw the tax rule reference.
sir, i have taken home loan jointly with my wife. she is a house wife and not earning any money. loan is deducting from my salaried saving bank account. when i am claiming tax benefits from home loan, my finance department people giving only 50% benefit saying home loan is jointly with ur wife. i am arguing with them as my wife not claiming any loan interest or not have any PAN card.
could u clarify my doubt and is there proof to get total home loan tax benifits
pls call me on 9502365656, it will be very kind of urself
Hi Sir,
Can you please let me know that if i can avail the tax benefit if EMI is still not got fixed for the home loan which bank approved for the home i have taken . Mine is CLIP ( Construction Linked Plan ) where bank is paying us loan amount as and when builder demand the same.
Now i have made the repayment of the principal amount as well as the interest amount which comes as we are taking amount from bank .
please let me know the same and also let me know that if i have another investment like LIC then can i avail the tax benefit from the principal/interest payment.
Regards,
Jeewan Singh
I am staying in my father in law house [rental house joint family] now i am purchased new flat and rent received rs.180000/- i have to pay house loan interest rs.285000 how much maximum interest allowed only for salary income and house rent income
Sir, If the following points are clarified, I will be most obliged. I have paying EMI for one house building loan taken for construction of self occupied residential building. For the same I am availing deduction under sec – 24(b). If I take another loan for the purpose of repairing of the same building now, wheather I shall be elibgible for the deduction of the interest part of the new loan for repairing of the building under any section of income tax. Please clarify. Regards
Dear Sir,
I have taken home loan for a under construction flat & paying the pre EMI(intrest). Also I am currently living in a rented house. Am I eligible to get the tax weiver on both HRA & home loan interest for the same financial year. Also please not e that my new flat is in other city / District & I stay in some other city & possession of new flat is in Mar – Apr 2012 as per builder.
Please let me know your inputs.
Sir,
I have taken a property on my wifes name only. And we have taken the house loan jointly. Can both of get the benefits? If yes please give me the solution?
Thanks!!! Ramesh