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)
Me nd my brother bought a house by taking loan frm SBI, my doubt is that EMI is deducting from my salary account and for that I take half of it from my bother, but the money which i take from him has no record. Can we both get benifit of Income tax in the ratio of 50-50.
I am paying for my Dad’s home loan in which he is the Applicant and myself and my mom are co applicant, but there is no source of income for both of my parents. Can I get benefit out of the home loan amount I pay. If yes could you please explain me the procedure to follow to get those benefit.
If I buy a house jointly with my wife and take a joint home loan, Can we both claim income tax deduction? How much Interest Deduction can each of us can claim in our individual returns. Whether Rs.150000/- each ( As our Interest portion in Repayment is around 3.4 lacs ) Kindly Advice.
My father is an co-applicant along with me for an house which we have bought & are staying. i have been paying the entire EMI with a tax benefit shared along with my father. this is done for last 8 years. Now can i have the entire tax benefit on my account alone. Please adivse.
I and my wife have a flat jointly in Mumbai purchased through a home loan. This house is rented. We are presently staying in Delhi in a rented house. Can I get HRA as well as claim tax relief for Home loan for the Mumbai flat even if the rent for this flat is being collected in my wife’s name?
Sir- have a property in Mumbai on loan. Annual interest on loan is 1.5 lac +. I have moved from Mumbai to another city and have given the flat on rent (A) . In the current city i am staying on rent (B). Now i am purchasing a ready property in current city with bank loan whose annual interest will be over 2.0 lac +. This property will remain empty for at least the next 2 years.
Question: What all should i show in my income tax declarations so that i get maximum benefit and also remain clean in the accounts of Itax.
I’ve property under two names ( my name as the first & my ex as the second ). Now, he wanted to sell the property & denied my rights – by asking all the profits to be given to him via his lawyer.
My questions are :-
1) Do I’ve the right to claim more than him as my name is the first ( instead of divided it equally ) ? How to go about it
2) I take back the property – & wanted to sell it off later….. can I sell it off without his signature?
Your view is much appreciated
TQ
i purchased a land through home loan with the name of my mother,she is housewife.i paid emi.
can i took the any benifit against income tax.my mother and me have joint account.if i didnt any benifit on income tax so plz guide me for this benifit.i m a job holder in private concern.
Hi, I was allotted a plot(125 sq yds) under a govt scheme in Punjab .And I chose to pay the land price under a Option-C which says 70% of the total price of the plot is to be deposited in 7 half yearly installments along with interest of 10%per annum.I have already paid 2 installments and others are to be paid in future.Can I avail tax benefit on this case.The plot allotted is in Punjab and I live in Delhi.
sir, i’ve taken a housing loan in 2010 December to book a house in chattishgarh housing board. the house is still under construction & likely to take another 1/2 years. i recently came to know about an income tax law which states that the house should be completed withen 3 years of taking loan,otherwise it rebate on interest will be limited to 30,000. this 3 years is from date of sanctioning of loan or date of last installment?so if my house completes in 2015 will i be able to claim tax rebate or not.
I have purchase a house with the name of my son an borrowed the loan from sbi both name. But the EMI amount deducted from my account only. Last year I claimed income tax benefit 50% from my salary. Can I claim 100% tax benefit from my salary. If I claim my son will not claim 50% from his salary. If it is possible Please confirm my though mail.
Hi..
I am going to purchase a second home & applying for new Home loan. However, I have already cleared the earlierdepartmental HBA on exisiting home. Pls let me know whether I will get the same tax benefit as stated under second home purchase ie deduction of Interest actual paid (and not limited INR1.5L) ??
Hi , i have taken home loan for construction purpose from SBI BANK. The property owner is my mother and i m paying the loan amount . so can i get income tax rebate.?
PLZ REPLY FAST…………..
I am residing in owned flat and have taken a residential plot on loan. Will i be eligible to claim tax rebate on said land. I am not planning to start any constructiuoin immediately.
dear Sir,
I have purchased one house in my wife”s name, who is house wife and all EMI is debited from my salary, whether i will get loan benefit? if not, then whether i will avail HRA benefit?
I took a home loan (2nd property) in Dec.2011. The construction of the hpouse is still under process. I have a pre EMI interest of Rs.25,000/- for the financial year 2011-12. I will be renting it in few months after completion of the house.Will I be eligible to claim the interest benefit in the income tax return for the financial year 2011-12.
Hi..
I am going to purchase a second home & applying for new Home loan. However, I have already cleared the earlier home loan on exisiting home. Pls let me know whether I will get the same tax benefit as stated under second home purchase ie deduction of Interest actual paid (and not limitedINR1.5L) ??
Hi thanks for sharing the valuable information for the public. Is there a way to claim the actual intereset paid on home loans ~Thanks Raj
Hi , i have taken home loan for construction purpose from HDFC BANK. The property owner is my mother and i m paying the loan amount . so can i get income tax rebate.???
i need your advice
sir plz reply……………….
Hi , i have taken home loan for construction purpose from HDFC BANK. The property owner is my mother and i m paying the loan amount . so can i get income tax rebate.???
sir plz reply……………….
Sir,
I need your expert advice in one of the concern. My son n my wife jointly had purchased the property in same location at Faridabad and we alla re living in new home where as the earlier home which is on my wife’s name is vaccant for more than 9 months and we are not able to get it on rent.
Is it possible for my son to claim some kind of rebate on tax as he is paying EMI for new home and we are not getting any rent from previous house.
Sir,
I have taken a home loan worth 2500000 and I am staying at same home at faridabad. Can I avail tax benefit for home loan and HRA benefit for same. Home loan is on my name and property is on my mother and my names. My father Mother, myself my wife and my 2 months old son lives in that poperty.
sir ,
i have taken home loan for construction purpose from SBI BANK. The property owner is my father and i m paying the loan amount . can i get income tax rebate.???
Hi , i have taken home loan for construction purpose from HDFC BANK. The property owner is my mother and i m paying the loan amount . so can i get income tax rebate.???
Sir, I work and live in rented accom in Gurgaon. Purchased a flat in Kolkata where my parents stay and the loan is alomost paid( 2 more years, so very little interest to be paid). I now purchased and possess another flat at Rajnagar, Ghaziabad, where I cannot stay due to the distance from my office. I am planning to loack it for the time being. Now what will be my tax implication considering,
I pay emi for the 1st flat(occupied by my parents), emi for 2nd flat(no occupancy) and pay rent in Gurgaon.
Thanks
I and my father are co applicants for a housing loan and now I want to get the house registered on my father’s name so what is the procedure for it kindly suggest
I have purchased a DDA flat.. If property is in my wife’s Name and she is co-applicant for home loan. I will pay full EMI.Shall I be eligible for rebate on home loan in income tax?
I have home loan of 10 Lacs jointly taken along with my mother. However now i want to become 100% owner of the property. Can i close the home loan first and then avail a home loan to buy the entire property?
I am the owner of a property and borrower of the loan for the purchase of the property. The EMI is 100% deducted from my income. Can I claim Tax benefits on behalf of myself and my husband ie 2 lacs toward the principal repayment and 3 lacs towards interest repayment?
Dear,
I want to know about of housing loan, If Husband & wife taken a loan in both name and house property in name of Wife than both are calim this deduction. Please provide your views
I have taken a RESIDENT LAND PURCHASE LOAN from HDFC , can i claim the interest pain under section 24?
my father purchase property from vastu vihar my father is land owner now he want to sale the flat in my name will i will get home loan
I have puchased a plot for house construction, proposed to construct in next year ie during Oct 2013 .can i avail tax rebate for this financial year 2012-13. I have got composite loan sanctioned for Rs.45,00,000, at present i have availed 20,00,000 and planned to avail the remaining during the construction time. Please advice me how can i avail tax benefit.
Is it possible to get possession certificate of the house after completion of the building where the occupancy certificate is not issued.
I Purchased a flat which is aound 7 kMs from my present flat and 11 Kms from my office, all the three – present flat, new flat and Office are with in 20 kms zone.
I am planng to letout the new flat. Is it possible to claim both HRA benifit and Housing Loan benifit, if possible plz. let know how to get the benift of both HRA and Housing loan.
Dear friends,
I have purchased a flat recently for which i am planing to take a loan. The same will be ready for possession in around Januray 2014. In this regard I wish to know that “will I be entitled to claim for tax relief on the interest paid by me on housing loan during the period which in which the possession of the flat has not been handed over to me.
If yes, then kindly clarify the amount regarding tax benefit on interest amount and principal amount paid by me during the period in which the possession has not been handed over to me. plz reply…….also on my email id if possible……..
warm regards,
rajesh
hello frnds…
we have took housing loan on join name with my wife and both are service people.
we have housing loan interest income is rs. 3,00,000
so in this case me and my wife both get rs. 1,50,000 and 1,50,000
or we get didection from the same?
plz rpl as early as u can…
i have booked a flat. now I am planning to take a loan. please answer the following queries:-
1. my wife who is a co-owner, can we take two loans againt this property. 2. the possession will be available in Dec. 2014, can we claim the benefits of interest paid till the time of possession. if yes how and how much.
3. whether the ratio of co-borrowing will decide the ratio in which principle/ interest will be devidied between me and my wife for claiming income tax benefits
me and my wife are joint owner in one property 1st-me, 2nd-my wife. in loan also me is first applicant and my wife is joint applicant. the entire EMI is being paid by me as i am only earning member not my wife. can you guide me how much maximum i can clam as interest and how much as a principal as my actual interest is coming as Rs. 250,000 and principal as 120,000/-
Hi,
I have booked a flat under construction linked plan and possession is due in December 2012. Please tell me, if I sell it today [April 2012] before possession/registration, what would be the tax liability. FYI: present cost is 60 lakhs and i booked it at 50 lakhs. Thanks, Pranay Verma
This is a very insightful article. Tax exemption for home loan interest repayment is a powerful tax saving tool for the middle class. The facets of this section should be well understood before applying for a home loan. At time, applying for a joint home loan might give higher overall tax saving for you and your spouse.
property is in my mothers name, i am only son, i am paying emi , cani get tax benifit,
Hi, Me and my wife is a co owner and co borrower of a house. If EMI is fully paid by me then can we both claim tax benefit of Interest and principal portion in equal basis or I have to open a joint account for EMI payment.
Sir, My father is retired from Govt. service and getting pension. My father has taken a home loan from LIC Housing in which my father is applicant and my brother and me are co-applicant. The registey of the flat (house) is in my father name and I pay all the EMI of the loan through my bank A/c. Then, Can take IT rebate benefits and How much. Can I also take rebate on stamp duty paid on the registry because the same is paid by my source of income.
I want to know that if I have 2 flats in my a/c and with SBI-home loan..what tax benifit I can avail at max. Principal should not beyond the limit of Rs.1,00000/- and the interest for both should not cross 1,50000/- by max OR what? It’s a doubt for me….If I purchase the 3rd one also..what should be the equation then in terms of tax benifit mainly.
i live in Chennai. I am planning to buy a flat in Pune. For this i am taking home loan from SBI pune. I will be continuing to stay in Chennai only (that means i will not be occupying / possessing personally this flat). Can u plz clarify on the income tax benefit for this scenario???
I have taken home loan of rs 20 lakh in which 5 lakh is margin money.can i get tax rebate for margin money like principle interest?
I have taken a HBA loan in 2007 from my company which is a PSU. The constructor is a joint venture company of WB Government. The flat is still under construction and expected to be completed by end of 2013. I have availed only half of my loan amount sanctioned by my company i.e. I have taken only Rs. 4 Lakhs out of total of Rs. 8 Lakhs loan sanctioned by my company as , payment to constructor is in instaliments.
My company is asking to start repayment of my loan. What should I pay first , the principal or the interest on payment already made to me . Kindly tell me details of income tax benefits I will get if I pay the principal first or if I pay the interest first.
Waiting for your advice. Thanks in advance.
Are you really answering our questions? because till today i have not recived my reply
I have purchased a house on wife`s name. Wife has no source of income and I have taken home loan on my name. Wife is co-applicant and I am applicant in home loan. I am making payment of EMIs through my bank account. Am I entitled to Income Tax benefit on loan interest and repayment of home loan?